The New York Times has an article about the troubles social networking companies are having when it comes to actually making money.
The only potential revenue stream from social networking is advertising. The dirty little secret about social networking is the fact that it’s a piss poor platform for generating clicks on those ads. Even though social networks can tailor advertising to every stupid little like and dislike you list in your profile, people want to spend time poking instead of clicking on advertisements.
Social networking advertising is not like search engine advertising. On a search engine, the user is actually seeking something. An advertisement on a Google search can actually fulfill an immediate need, while an advertisement on Facebook is generally an annoyance.