With the huge valuations given to MySpace, Facebook and Bebo, shareholders should expect big dividends from their investment. But it continues to be a challenge for all of the social marketing sites to monetise their sites.

With the likelihood (are we already there?) of a worldwide recession public spending is reduced. Advertisers must either increase their ad spend to maintain their customer loyalty, or batten the hatches and ride the downturn out. Either way, for Joe Public, advertising becomes less relevant.

Social networks have it doubly hard. Their advertising model hasn't been successful in the past. In the new climate surely it gets harder.

MySpace will miss it's US$1 billion ad revenue target this year by US$250 million.Shares in the company have dropped 5% as a result. Facebook ad revenue is predicted at US$265 million. While the MySpace revenue has increased 50% on last year the spend per user per year is only $6-7, considered very small.

The social network response is the targeted ad concept, but for advertisers this is seen as experimental and the uptake has not be great. Targeted ads are an extension of Kevin Robert's LOVEMARKS idea - where users declare their allegiance to a brand (e.g Ford or Holden) and ads are targeted to the user based on their declaration. The problem is that social network users aren't there for the advertising - they are there to connect to friends and colleagues - so I can understand the apprehension from advertisers.

The general consensus is for social networks to hang in there and wait it out. Whoever is left is likely to win, and the result of that battle could be years away.