The Associated Press reported Monday that popular online communications website Facebook is set for a new upgrade and redesign to allow users to add items on "Walls" more easily, while the "Wall" feature will incorporate functions previously found in "Mini-Feed's." Facebook is currently in heavy competition with News Corp. (NYSE: NWS)'s MySpace networking site as both "vie to become the central hub of online communications" by removing "clutter" and making the sites easier the navigate.

Part of the update comes as users have made less and less drastic changes to their profiles, instead adding single images or changing their statuses. Facebook is also aiming to reduce the size of profiles loaded with various applications that also appear on users "Mini-Feeds" and "Walls". Users will also be able to delete items from those functions, but no new information about online behavior previously unavailable will suddenly appear, according to Facebook developers and executives.

This past holiday weekend my colleague Doug McIntyre gave support to a blog I wrote in May 2007 when he posted Google (GOOG): The Failure Of YouTube. In my rant I gave a detailed analysis outlining how Google had overpaid for YouTube by a fantastic amount.

In the story Doug quotes projections that 2008 revenue generated by Google might gross $200 million from YouTube. That's revenue, not profit. A 20% profit would be $40 million if that was possible. In the article I wrote: How can I say Google overpaid for YouTube? I stated the case in plain English why the YouTube investment would have to earn $300 million (net, not gross) minimum, in its first year not to be dillutive.

They missed the target by a mile. They will continue to miss the target and I do not expect it to ever justify the cost. Just because Google has lots of cash slushing around does not mean they have money to waste.

Marc Andreessen was only in his early 20s when he changed the world forever. Of course, he helped to create the Mosaic browser and was the cofounder of Netscape Communications (he even was on the front cover of Time).

No doubt, he learned some important lessons – especially during the dot-com bust. In fact, he has been able to deal with the adversity, having created such great companies as Opsware – which was sold to Hewlett-Packard (NYSE: HPQ) recently for $1.6 billion.

Well, now Andreessen is going to help another tech wunderkind: Mark Zuckerberg, who is the mastermind of Facebook. That is, Andreessen will join the company's board.

While such maneuverings are often cosmetic, I think this move is more substantive. Talking to a variety of Silicon Valley VCs, there's much skepticism about Zuckerberg's capabilities. Besides, is social networking really going to be a platform that can be monetized effectively – and justify the rich valuations?

No doubt, Andreessen understands the pressures and the importance of making key strategic decisions. So all in all, this looks like a pretty savvy move for Facebook.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.

I remember way, way back to November 2006 when Wall Street was stunned that Google (NASDAQ:GOOG) was paying the ungodly sum of $1.65 billion for privately held YouTube. How were they to monetize this goofy, home video web site? Since November 2006, it appears that Google got a bargain when compared to other social networking web sites.

Facebook has over 80 million users including a new Facebook profile for Democratic presidential nominee Barack Obama. Facebook attained Wall Street relevancy last year when Microsoft (NASDAQ: MSFT) agreed to pay the unheard of $246 million for a 1.6% ownership stake. That October 24, 2007, Microsoft investment valued Facebook at nearly $10 billion in the private equity world. As of yet, there is no filed Facebook IPO, but investors bet the company will file an IPO before the end of 2009.

The new player capturing headlines in the social networking world is LinkedIn. The company is designed for the business and professional world. The more than 23 million registered users represent over 150 different industries. It's a place to swap ideas, best practices and other opportunities.

Many Wall Street analysts thought that when Microsoft (NASDAQ: MSFT) lost its bid for Yahoo! (NASDAQ: YHOO) that it would take the $45 billion it was going to spend and buy other online companies.

Think again. Microsoft's management says it is not so. According to the FT, "Steve Ballmer, chief executive, scotched talk that Microsoft would turn to a `plan B' of other acquisitions to boost its online presence." Ballmer feels that buying more internet companies will not improve its share of the search market. He is not simply after more pageviews.

The news is probably disappointing to several large online companies. AOL, Facebook, Monster (NASDAQ: MNST), and Digg might all have been part of a Microsoft plan to improve the size of its presence on the web.

The Microsoft comments send another message. Search is important. Display advertising is not. Search is an efficient way to make money. Display advertising's best growth years are behind it.

If Ballmer is right, the online world is about to go through a major upheaval.

Douglas A. McIntyre is an editor at 247wallst.com.

I recently saw a presentation from Dan Nye, who is the CEO of LinkedIn. Of course, all the metrics were spiking. Then again, LinkedIn is the place for professionals to connect.

So, this week the firm has snagged $53 million in venture capital. The investors include Bain Capital Ventures, Sequoia Capital, Greylock Partners, and Bessemer Ventures. As a sign of their optimism, the valuation of the investment came to around $1 billion.

While Facebook and MySpace get lots of buzz, I think LinkedIn is a more interesting play. Basically, the company is leveraging user-generated content to build an immensely valuable database. For example, if an advertiser wants to target someone located in California that is interested in Linux systems, you will definitely get some hits. This is critically important. After all, many other social networks have a tough time monetizing things.

I read an interesting article over at CNBC about News Corp.'s (NYSE: NWS) MySpace asset. It seems that the social-networking site wants to do something about the fact that it won't succeed in booking $1 billion in net sales before the conclusion of the conglomerate's fiscal year. MySpace will undergo an aesthetic overhaul to make the site more appealing. As it is now, many users might find the site too busy and not so friendly in terms of navigation. The changes will take place over time, beginning this week and concluding in the fall.

The question on my mind now is, did News Corp. really need MySpace? Sure, the site has a heck of a lot of registered users, well over 100 million worldwide, but now people are wondering how effectively these users can be exploited in terms of generating economic value. The article mentioned the disappointing results so far from an advertising deal made with Google (NASDAQ: GOOG) back in 2006, one which had a $900 million figure attached to it.

The problem here for News Corp. is that users are fickle and may eventually find another MySpace in the future (obviously, Facebook is an example of how social networking continues to evolve and how any big brand in this arena can be challenged at any time). That wouldn't be good for long-term growth. Another problem cited is the fact that active MySpace users just want to socialize with their friends and/or network; they don't care about the ads. There's a lot of truth to this claim, and it's a huge issue going forward.

Live Nation (NYSE: LYV) has secured a deal with Facebook and created an application for the social-networking site to sell concert tickets and promote concerts that may interest users. In addition, according to Variety, the application brings the "My Live Nation" global concert search engine into Facebook and allows users to sync the new application with their music library to receive concert updates automatically. Wired reports that the Live Nation application does not, however, link directly with your Apple Inc. (NASDAQ: AAPL) iTunes library or another third-party program, instead giving the user the option of pointing toward a library or not.

It's no surprise that one of the largest concert promoters has moved in with one of the top social-networking sites. Given that Live Nation is no stranger to wide exposure, the number of users on Facebook who may already be familiar with the promoter is likely to be significant. Instead, the aspects of Live Nation's application that allow users to share upcoming concerts and shows they are either attending or would like to attend should increase awareness of local and regional concerts -- at least on Facebook.

Not a bad idea in the end, even if it is some form of viral marketing like the cited Wired and Variety articles claim. It's not like Facebook is not already being used to market and sell music in other forms; the TuneSocial program basically advertises albums users are listening to, and iLike streams tracks that users enjoy. Live Nation offers the next logical step with concerts but directly connects users with the ability to purchase tickets and boast or share with friends.

For some time there has been an uneasy feeling that Web 2.0 companies were having trouble making money. A number of the companies are private and not much is said about how their financials work. Digg.com does not issue quarterly statements.

But some of the new age companies like MySpace, which was bought by News Corp (NYSE: NWS) and YouTube, which was bought by Google (NASDAQ: GOOG), have enough of their financials available for Wall Street to get an idea of what is going on.

Based on comments from Google and News Corp, their huge Web 2.0 sites are not big money-makers. MySpace does well under $1 billion in annual revenue. Its smaller rival, Facebook, was recently valued at $15 billion. That number now looks very high.

According to the FT, "The shortage of revenue among social networks, blogs and other "social media" sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers."

Facebook, YouTube and MySpace may draw tens of millions of visitors each month, but they can't make a dime. Marketers are not interested in amateur video and postings from people who spend 20 hours a day on PCs and are afraid to leave their homes.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 newsletter.

Gawker reports that Ben Mezrich, a Harvard graduate and author of a 'non-fiction' account of MIT students making it big in Las Vegas, has received a million dollar contract to write a book about Facebook. Mezrich's book proposal claims that his source co-founder, Eduardo Saverin, anticipated a Fall 2008 IPO for Facebook. But Facebook denies the claim. To go public this fall, Facebook would have had to register by now.

Here are some other story elements from Gawker:

• Founder Mark Zuckerberg and Severin started Facebook to help get into an exclusive Harvard Final club
• They also thought Facebook would boost their social life
• In high school, Zuckerberg got on an FBI list for accidentally hacking into a government site
• Zuckerberg and Severin "ate koala on the yacht of the CEO of Sun Microsystems" (NASDAQ: JAVA)

Meanwhile Zuckerberg has sued Saverin, claiming "Saverin tried to hijack the company by freezing its bank account when Facebook desperately needed cash in its formative months." And Saverin countersued for a return on his initial investment.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

While I won't claim the title of Most Hip Person on the planet, I do have a fair bit of "new media" credibility. And I think it should be instructive that I've finally embraced (or at least given a friendly pat on the back to) Facebook, whereas News Corp.'s (NYSE: NWS) MySpace continues to horrify. Where Facebook pokes, MySpace cackles wickedly; where Facebook exposes me to unwelcome questions from first grade classmates, MySpace exposes your children to unwelcome advances from questionable adults. Facebook is silly; MySpace is spooky.

The two social networking sites sprung up at about the same time, but focused on vastly different niches. Facebook was originally meant to monopolize electronically on the popularity of the "Freshman Facebook," a publication put together by most colleges displaying the faces of the new students and immediately hoarded by upperclassman hoping to find their one true love (at least for tonight). Why not bring the desirability of fresh faces to a much wider audience? At first the network was limited to college students, but soon the barely legal founder was pitching his product at a bigger market. And then my boss asked me to join and the rest is writing on my wall.

MySpace, on the other hand, was initially marketed to indie bands (although it wasn't meant to be a niche, its developers were active in the LA music scene and thought that would be a great way to attract other users) as a way to spread the musical love and relieve struggling artists of the need to sink money into building a website. The concept was a virtuous circle -- musicians attract fans, fans attract musicians, and so on forever.

Now musicians are still on MySpace, and college students are still on Facebook, but while Facebook seems to have (if not transcended at least) risen above its origins to attract "networks" and "groups" whose affinity ranges from a common employer to a favorite politician or social cause; MySpace has sputtered, devolving ever more into awful allegations and truths. Pedophiles are reported to find victims through their MySpace pages, and the site is notorious for cyberbullying (scary!). On the other hand, there is a big kerfuffle over Scrabble on Facebook (silly!).

I reluctantly set up an account on FaceBook several months ago, and now it's moderately interesting as a way to reconnect with friends from 1st grade, and occasionally peek in on the lives of my college and business school classmates. It occasionally bugs me with its "pokes" and "candy corn" (what the heck?) but it's not riddled with often obscene and sometimes frightening content, as is MySpace; the space that's not mine, at all.

Vote in our poll for MySpace or Facebook as your preferred brand, and let us know in the comments why you love it.

While at a credit card conference recently, I met up with a data analytics expert. He talked about how companies like Amazon.com (NASDAQ: AMZN) and Google (NASDAQ: GOOG) have dominated their sectors because of their mastery of creative algorithms (for example, somehow Amazon seems to know the books I like).

Well, he also talked up myBarackObama.com. He thought this was the future of marketing; that is, using social networking to supercharge monetization.

He has a point. In fact, a recent piece in Bloomberg.com has some good thoughts on this.

Keep in mind that myBarackObama.com has extensive profiles on about 800,000 people. What's more, as members continue to interact with the site -- in terms of comments and so on -- the database gets stronger and stronger.

In other words, myBarackObama.com is a high value asset that could be instrumental for the Democrats in future elections.

OK, so what might myBarackObama.com be worth? If you look at the valuations of social networks like Facebook, the figure is likely to be substantial (by the way, Obama's Facebook page has 790,000 friends). And according to the Bloomberg piece, the estimate is that the market value is about $200 million or so.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MAJOR PAPERS:

• In an effort to refocus on coffee, the Wall Street Journal reported that Starbucks Corporation (NASDAQ: SBUX) will attempt overhaul its entertainment business.
• Private equity players Apax Partners and Kohlberg Kravis Roberts, along with Lehman Brothers Holdings Inc (NYSE: LEH) in a supporting role, are looking to form a consortium to examine a bid for the insurance assets of The Royal Bank of Scotland Group Plc (NYSE: RBS), the Financial Times reported.

OTHER PAPERS:

• Yahoo! Inc (NASDAQ: YHOO) is going to let outside developers create applications across its network of sites, the New York Times contended. The search engine is also going to combine its online services under the social profile concept in an attempt to allow its users to replicate the social experience that social networks like News Corporation's (NYSE: NWS) MySpace and Facebook have made so popular.

WEB SITES:

• Research In Motion Limited (NASDAQ: RIMM) will reportedly delay the launch of its new hotly anticipated 3G BlackBerry phone, Fortune reported, which the company is developing for AT&T Inc (NYSE: T). The phone, originally supposed to be launched in June, may not be released until as late as August, inside sources said.

News Corp. (NYSE: NWS) has not had its fill of the revenue failure of MySpace in the U.S., so it wants to try to address that problem overseas.

According to The Wall Street Journal, "Every single market we're going [into], we're seeing significant growth in revenues across the board," said Travis Katz, senior vice president in charge of MySpace's international business.

Maybe the MySpace model of trying to sell advertising to marketers who want to reach social network users who have no interest in looking at ads will not be such a failure outside the U.S.

MySpace might actually be doing worse, but in late 2006, Google (NASDAQ: GOOG) signed at three-year deal making it the exclusive search engine for the social network and guaranteeing News Corp. $900 million in shared ad revenue. Without that, it is safe to say that MySpace's revenue would be quite a bit lower.

Back in January, Scrabble makers Mattel (NYSE: MAT) and Hasbro (NYSE: HAS) sent cease and desist notices to four parties involved with the production and distribution of Scrabulous, a popular Facebook application based on Scrabble.

The company has since reportedly entered into negotiations with the creators of Scrabulous, aimed at working out some kind of licensing deal, but now it seems that Mattel may be deciding to do it without them.

"Scrabble by Mattel" has appeared on Facebook in Beta mode, although it is technically only available to players outside of North America, where Hasbro owns the rights.

According to the New York Times, the official version of Scrabble has received mixed reviews so far: "Facebook Scrabble takes a long time to load, does not always quickly update to show recent moves, and the words the game will accept do not reflect standard Scrabble dictionaries, or even the English language."

Given how popular and functional the Scrabulous app is, pairing up with its Calcutta-based creators seems like the best solution for Mattel and Hasbro -- by agreeing not to sue them for past copyright infringement, they could probably get them to run the game for a cut of the substantial advertising revenue it generates.

Tens of thousands of Scrabulous players threatened to boycott Mattel products if Scrabulous is shut down.