Despite predictions that web users were beginning to tire of social networks, it appears Facebook's popularity is continuing to rise. The social networking site has just reached the 150 million member mark.
In an official blog, CEO Mark Zuckerberg said that almost half of those active members use the site every day.
However, despite the milestone, Facebook and other social networking sites have a major challenge in discovering ways of generating revenue at levels that are on par with their massive usage. It has become clear that conventional online advertising formats, like banners and pay-per-click text ads, aren't as effective within social networking sites as they are in search engines and web portals.
So, Facebook, MySpace and other big social networks are trying to develop online ad vehicles that their users will find engaging and useful. Their attempts have failed to yield the desired results and in some cases, as in Facebook's Beacon programme, backfired by creating privacy concerns.
In a study published in November, IDC found that while the popularity of social networks climbs, many users tune out these sites' ads. More than half of US residents with internet access use social-networking sites, a trend expected to continue growing, IDC found.
Among users of social-networking sites, more than 75 percent visit them at least once a week and 57 percent do so at least once a day. And 61 percent of these people admitted to spending at least 30 minutes on a social-networking site every time they visit, or stay logged in permanently.
Unfortunately for Facebook and MySpace, people are significantly less interested in online ads when they are in a social-networking site. Social-network ads generate fewer clicks than the average ad on the web at large - 57 percent versus 79 percent - and they lead to fewer purchases, at a rate of 11 percent versus 23 percent.
The idea of 'social' ads, in which marketers try to leverage people's network of friends and family to promote products, is "stillborn", according to IDC, which found that of all US internet users, only 3 percent would be amenable to letting web publishers use their contacts for advertising.
So as Zuckerberg marks the 150 million-plus member milestone as "a great start to 2009", Facebook's advertisers will surely be expecting the company to finally deliver effective tools for them to get the attention of those users.