An article in the NYTimes entitled MySpace might have friends but it wants ad money provides feedback and direction on the monetization of social networking sites.

Apparently both MySpace and Facebook have not earnt as much as their backers had expected, and would have liked, from incorporating ads on them.

I have to say I feel the same way. I display a few Google Ads on MyDogSpace, and it is the worst performing ad earner of all my sites.

Logically I think it is because people go to the site to hang around and interact. They are there for a purpose - have reached their destination.

It’s very different from ads displayed on information sites. People are looking for information, and if they don’t find it on yours, they will click on a relevant ad that interests them, and may provide a better answer. I earn a lot more from dogs-only.com, as compared to mydogspace.com.au.

Mind you, I haven’t aggressively displayed ads on mydogspace. Especially after the last major software upgrade, which completely replaced most of my templates, including the ad customisation and even seo titles that I had added in. I just haven’t had time to add the ads back in. And mydogspace is much more of a fun site, for me and members.

It’s on my list of things to do, to actively display products from xml feeds on the shopping page, and to auto-rate a product image on the home page, rather than the boring static link that has been there for the last few months.

But directionally it seems that social networking sites benefit their owners most from creating awareness, and sending traffic to the main site, rather than earning money on their own.