Privately held social network Facebook just saw its prices go higher. Digital Sky Technologies has announced it will pay $14.77 a share for an additional stake in the social network, bumping its total position in the company to up to 3.5%. If this deal is completed, it would imply a total value of $6.5 billion – down about one-third from Digital Sky's last investment in Facebook.

Even the $6.5 billion a share value is optimistic. Investors have pushed the value to below $5 billion in private secondary market transactions over the past few weeks. Nonetheless, the relatively new company is still valued well above major technology and media heavyweights, including CBS (NYSE: CBS) with a $4.06 billion market cap and SalesForce.com (NYSE: CRM) at a $4.72 billion market cap.

Given my position as a long-time denizen of the dot-com world, with dozens of contacts in new media and venture capital and all of the numbered Webs (1.0, 2.0 and maybe even 3.0), I'm quite frequently invited to things. Some are valuable networking tools, like LinkedIn; others are fun and a bit useful for keeping track of my virtual colleagues, like Twitter. Still others, like AIM, are vital for day-to-day working life.

And then there are the sites where my so-called "friends" hang out. It seems quite ironic that many of the former colleagues and distant contacts who invite me to "keep up with what he and your other friends are doing" were never what I would categorize as "friends." Vexing rivals? Quixotic bosses? Difficult customers? Unhappy underlings? Probably more like it. While I understand that social networking sites like Facebook.com and StumbleUpon and, to a lesser extent, MySpace and del.icio.us and the rest of them, are the rage right now -- and are used by many legitimate corporate types for actual work purposes -- well, I'm highly uncomfortable with the rampant use of the word "friend."

Let's face it: even if I'm pleased because Brian in Legal delivered that contract to me quickly, he's not actually my "buddy"; nor is the receptionist you just hired ready to be asked to join your "circle of friends." Plenty of people with whom I could happily carry on pre-conference-call banter, while I'm sure they're quite lovely, just aren't friends. Flickr gives us a break and lets us designate lots of "contacts," while Twitter has recently changed its nomenclature to count those you are following, and those that follow you. This makes sense to me! This is not presumptuous or uncomfortable.

Just because my name is in your contact list, Mr. and Ms. New Media Executive, it does not mean that you are my friend.

Social networking sites are all the rage and growing fast. A little over a year ago on July 19, 2006, Rupert Murdoch's NewsCorp (NYSE: NWS) paid $580 million for MySpace.com. It has continued to grow and establish business partnerships, bringing comments that this was the biggest deal of the new millennium, and garnering staggering valuations that it is worth upward of $10 billion.

Early on, my teenage daughter was spending countless hours on the site (and probably yours, too) with her friends and it has grown to be a real community. But that success was bound to be copied, and now it appears that Facebook.com is stealing some of MySpace's thunder.

According to reports, Facebook is growing faster than MySpace, and having started on college campuses, caters to a better educated and more affluent customer base. My daughter, now in college is making the switch. This does not mean that there is not room for both of them, but it does indicate the market is still wide open and that there is plenty of opportunity. It is rumored that Facebook has already turned down multi-billion dollar offers to be acquired and is gearing up for a grand IPO some day in the foreseeable future. Based on all the hype and the growth of the site I do not think I would be going out on a limb to suggest an IPO would be the hottest thing since Google Inc. (NASDAQ: GOOG), and they know it.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Mark Mowrey, editor of the Prudent Speculator TechValue Report, chose Cogent Inc. (NASDAQ: COGT), which rose 41% as of June 1, 2007. Although he maintains a $24 price target for those who own the stock, he no longer is recommending purchase.

For his new top idea, Mark looks at United Online Inc. (NASDAQ: UNTD). The advisor explains, "For as many reasons to be wary of the company, we find more to like about this net-centric company.

"Founded as Juno Online Services in May 1995, and formed via the merger of that company with fellow dial-up Internet services provider NetZero in June 2001, United Online is one of a select few surviving early Net access players.

"As UNTD milks the dial-up business for cash flow, management hopes to transition as many of those paying customers as they can to a new broadband offering. Still, revenue from the communications segment is declining at a rapid clip, falling 13 percent in 2006 to $375.9 million.

"So what is there to like about a company with declining revenue in its core business, the only savior for which is entry into an even more competitive space? The general answer is the provision of services folks utilize once they're already on the Net.

With Google Inc (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO) seeming to be in the midst now of a war for acquisitions, there are reports that the possible linkage of Yahoo! and Facebook is now stalled. This is after talks between the two already became very close to reaching a deal back in July. So, what's the holdup?

Is it the asking price Facebook wants, or is Yahoo! a little hesitant to make an acquisition of questionable value? Well heck, almost every high-profile acquisition recently has been of questionable value -- like the Google-YouTube marriage. Although, News Corp.'s purchase of MySpace.com has been hailed as genius from every angle.

Perhaps Yahoo! is not that intent on expanding like has been reported. Or, maybe it's focused on trying to get its next-generation search technology, Project Panama, finally out the door so that the market will have something to talk about -- anything -- that could prove a challenge to Google's search business dominance.

I'm all about first-mover advantage and brand equity; Google may not have the absolute best search engine on the planet for all needs, but it was there first with advertising that worked for customers and results that made information research results uncannily like what a searcher was actually looking for. Yahoo! and Ask.com have made great strides, but unseating Google from its first-mover perch is going to be a tough one. So, MySpace has been bought, Youtube has been bought, but Facebook is sitting pretty. For now.

With the rumors swirling that Yahoo! may buy Facebook.com, I have to pause and wonder if that could be the biggest kick in the rear to Yahoo! Inc. (NASDAQ: YHOO) investors, or will it end up being a stroke of genius? When eBay bought Skype for over $3 billion not too long ago, I wondered how in the world eBay could ever justify that kind of price. Skype is, after all, a VoIP service that is a great offering to customers, but was not at the time generating the cash flow that would justify the price. Skype makes a pretty good killing these days -- but I still wonder if it was really worth the price that eBay paid?

When News Corp. paid $580 million for MySpace.com, that was a relative bargain in almost every respect. MySpace.com has over 100 million registered users and to make that initial investment back seems like a cakewalk -- and Rupert Murdoch knew that. Google has already partnered with MySpace for a newer $900 million investment. Shrewd, and a good move on the part of Murdoch. But can Facebook.com really generate the $100 million in annual ad revenues that the WSJ predicts? I'd love to see a fact-filled breakdown of this figure along with industry projections and live data. At this time, color me unconvinced.

Facebook.com, with less than 15 million registered users, would have a hard time convincing me that it's worth $1 billion. Sure there is probably ample opportunity to make ad revenue, and Yahoo! could stand to continue upping its advertising streams with newer, flashier web properties. But while Google has the lion's share of the Internet search market and Yahoo! is a distant second, there must be some pretty strong faith in the halls of Yahoo's Sunnyvale headquarters these days. As a Yahoo! shareholder, do you think Facebook.com is worth $1 billion?