One of these days, Facebook is likely to go public. But how much could its shares be worth in an initial public offering? The numbers are all over the place. From Bloomberg's estimate late last year that it was worth $25 billion to Fortune's estimate last August of $50 billion. Now, there is another report from a financial research firm, Trefis, that pegs the value at $45 billion today -- but potentially as much as $125 billion, if a few things go right.

One of the things that could go right, is coming up a with a new way to generate revenue -- and Facebook says it has a plan. It's called "sponsored stories." The company plans to pull content out of members' status updates for use in advertisements that will appear in their friends' Facebook pages.

The financial crisis, employment market and social media explosion have converged, providing a new level of clarity into what is happening in the world around us. Where was ground zero for this financial catastrophe? Well, according to the LinkedIn blog, five companies have shown the most action: Barclays (BCS), Credit Suisse (CS), Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM). Interestingly, Goldman Sachs (GS), among the biggest winners now that we're pulling out from the recession, didn't see as much play.

The three major social media sites have been pushing new tools out to their user communities aggressively over the past year. Each company has its own set of rumors, from IPOs to being on both sides of an acquisition. While the ultimate 2010 aims of Facebook, Twitter and LinkedIn may not have been revealed to us yet, it is clear that all three are looking for ways to beef up revenue and demonstrate long-term viability.

Whether or not Facebook goes public this year, it's still pointed toward that ultimate goal. The 350-million member social network is focused on finding new sources of revenue and gaining better penetration into those it already has. Even if it's more than a year away, it's never too soon to start shoring up your financial statements for an IPO. The latest new feature from Facebook, which has been announcing enhancements fairly rapidly over the past few months, is targeted directly at advertisers, underscoring the importance that the company's attaching to revenue growth.

Does anyone remember Friendster? For about ten minutes seven years ago, it was the hottest thing in social networking. The site that effectively kicked off the social media movement didn't stay in vogue long, however, eventually riding a wave of user referrals to Asia. Meanwhile, MySpace, Facebook and Twitter came along, taking over the sector -- and the hype that comes with it.

Well, Friendster is worth something to somebody, it seems. The company is due to be sold at the end of the month for $100 million. The social networking service is tops in Asia, which is where more than half of its 100 million-strong user base can be found.

The Twitter ecosystem may be changing constantly, but most of that comes on the back of individual developers and outside companies. They beat on Twitter APIs to create new products that may win them glory, recognition or cash. Over the past month, though, Twitter itself has gotten into the game, releasing or announcing a handful of new features.

A new function for "retweeting" (echoing another's tweet to your own followers), changes to how trending topics are managed, and the ability to create lists are new tools intended to engage users ... on the Twitter.com website. Considered within the context of Twitter's changed terms of service this year, the upgrades may be part of a broader ad-based revenue plan.

Company attitudes toward social media sites vary. Some swing the doors wide open, allowing employees to tend to their Facebook farms and update Twitter statuses throughout the day. Others lock 'em down, keeping non-business site access to a minimum.

A recent study found that, in the United States, 77% of employees with Facebook accounts check in with the community from the office. And, the amount of time they're spending in this part of the online world is growing. In the United Kingdom, another study found that 57% log in regularly from work, costing their employers 40 minutes a day.

Philip Wicks, a consultant at Morse PLC, a technology research firm in London, "It isn't just something you can do for half an hour during a lunch break but all through the day and because of that, it has a huge impact because people aren't necessarily concentrating on what they should be doing during the day." He estimates that this translates to lost productivity of $2.25 billion a year.

It seems like the obvious move would be to block the sites, but William Beers of PricewaterhouseCoopers disagrees. "Instead of trying to shut it down, I think we should try to embrace these technologies, put in a nice policy that governs it and explain to users the risks related to it, provide some training and then see what business benefits we can have from it," he said.

Modest goals don't seem to be on the agenda for Facebook. Sheryl Sandberg, the company's chief operating officer, is shooting for Google (NASDAQ: GOOG). The social networking company seeks its ad market as rivaling (or even surpassing) Google's search ad market in size. Facebook says it's on target to bring in $500 million in revenue this year (Sandberg didn't confirm it, though).

With its 300 million users, Sandberg has been trying to convince the world that her company has a solid business model in place. The perception that eyeballs don't necessarily equal dollars, born of the internet boom a decade ago, isn't necessarily true any more, as demonstrated by Google's ability to monetize search (and hit record profits) has demonstrated. For the third quarter of 2009, the search engine giant raked in net revenue of $4.38 billion.

Have you ever looked at your Yahoo! (NASDAQ: YHOO) Flickr account and thought, "Why am I doing this? I can just throw my pics up on Facebook"? If this has crossed your mind, you're not alone. In fact, many photo-sharing sites – Snapfish (NYSE: HPQ), Photobucket, Picasa (NASDAQ: GOOG) and Shutterfly, as well as Flickr – are asking the same questions. With the development and enhancement of photo management capabilities in major social networking websites, niche players need to find new ways to stay relevant.

The situation is still far from grim. Fed by traffic from their behemoth owners, the photo-sharing sites remain substantial forces, and they are currently home to more than 20 billion pictures. There's still plenty of interest in these environments ... which has been bolstered by specific features that make the likes of Flickr attractive to both professional photographers and amateur shooters. The ability to order prints and personalize portfolios, for example, still provides an edge over sites like Facebook and MySpace (NYSE: NEWS).

Nonetheless, the threats from the social networking space are quite real.

In a somewhat-telegraphed move, the omnipresent Google (NASDAQ: GOOG) is introducing public profiles for its users' online identities. Google Operating System had an interesting point, "It's not a stretch to see that these profiles are the perfect host for your activity streams and your public activities could become a part of the profile (uploading photos to a public album, bookmarking web pages, posting a new blog post)."

In addition to being able to share things with friends, this move is putting Google strikingly closer to the News Feed that Facebook uses to keep users abreast of what others are doing in their networks.

With Gmail, GFinance, Search/Web History, Google AdSense, Checkout and Analytics on my blog, Calendar, and Google Chat, I'm a heavy Google user. Now, by connecting me with my friends, Google is on its way to creating a social network by aggregating all my web activities and allowing me to share them with others.

I think this is a stronger position for a social network than Facebook's closed garden approach. Facebook needs to have ex-Facebook activity in their network, but its Beacon system seems to have met with a lot of pushback from privacy groups. Google just will aggregate my activity where I'm actually doing it.

Oh, and my profile?

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Zack Miller
Analyst from Jerusalem

About Zack:
Backing the truck up to load up on the GOOG!
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Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author is long GOOG stock.

I was once a teenager. Really. And I think I was, well, kind of uncool. I was actually a cheerleader, which was totally not cool in the late 80s and early 90s. I wore acid-wash jeans and shoulder pads and penny loafers, which were cool. Then.

So when I tell you that this new Wal-Mart thing is uncool, I should know. Because it looks a lot like me, in 1987. That girl on the left here, in one of the videos on Wal-Mart's new The Hub social networking site for teens, she looks eerily like my best friend, Courtney. Wearing the exact same clothes. Let me say this: in 2006, that is not a good thing.

No, Wal-Mart isn't showing video from the 80s. It's trying to become some cool locale for tweens and teens. You know, where they can discuss fashion and music and -- well, probably not sex. As Brian White pointed out last week, there are so many rules about what teens can do with the home pages the company hopes they will create on the MySpace-type The Hub, why would any cool, edgy teen want to play here? To show off their facility navigating the fashion wasteland of the retail giant's stores?

According to Bob Garfield of Advertising Age, "If well-executed, such an effort might cultivate individual users, gather market intelligence on the group, destigmatize Wal-Mart as a declasse purveyor of unfashionable clothing and establish a beachhead on the web for the fast-approaching digital future ... [but] it's totally not well-executed. It's the most not-well-executed ever."

"We shouldn't tuck anything in, it's so not cool anymore," says the pink-tee and acid-wash-jeans clad "Ashley" on her featured video (clearly not produced, or written, by a teenaged girl named "Ashley"). Nope. And neither are you, Wal-Mart.

MySpace may be the space of the moment, receiving praise, aplomb and (most importantly) generating traffic to Google in ever-greater numbers, but it's not even the middle of the social network craze. Really, the whole social network effect, as a theory and a technological practicality, started with the personal web sites of the early nineties. Personal web sites beget blogs beget networking sites like Orkut and LinkedIn beget MySpace, AIM Pages, YouTube, and whatever's to come next.

Thanks to a effort by white shoe management consultancy McKinsey to get the great minds of YouTube, Yahoo! and the like together with the old garde of the gigantic media (and I'm asking myself, and Aaron Cohen of Bolt Media, who was interviewed as a person of knowledge for the Financial Times piece: whither side of the old/new divide does Time Warner fall?), social networking is now coming into the good graces of the giants of Wall Street and Hollywood and Madison Avenue and all those places where fashion and money meet the people.

Robert Young, writing for GigaOm, calls MySpace the "it girl," and describes the infatuation with "her" and her groupies this way: "nearly every media company and venture capital fund on the planet is out on the dance floor stumbling over one another to see if they can identify the next breathless social networking beauty."