Say it ain't so, MySpace?

News Corp. (NYSE: NWS) is in a state of flux after its online businesses appear to be coming up short of initial projections, according to TechCrunch. Iconic chieftain Rupert Murdoch had projected that the media conglomerate's Web arm would generate $1 billion in revenue during the current fiscal year, which ends in June, with MySpace accounting for 80% of the take.

TechCrunch has sources claiming that the actual revenue will come in closer to $900 million, and that executive defections and reshuffling continue at the company.

Coming up short by 10% may not seem like much in a softening economy, but it's worse than that. Because Google (Nasdaq: GOOG) is locked into paying News Corp. at least $300 million annually for the right to serve ads on MySpace, the miss is actually more like generating $600 million throughout Fox's interactive properties than $700 million.

This probably isn't surprising news. Google blamed its fourth-quarter miss two months ago, in part, on the difficulty in monetizing social networking. That came weeks after United Online (Nasdaq: UNTD) had to scrap its IPO. Microsoft (Nasdaq: MSFT) and Yahoo! (Nasdaq: YHOO) were once bent on buying Facebook, before Microsoft agreed to buy the smallest sliver at a premium to expand its role as the exclusive ad provider. Even Bebo, another fast-growing social network that the paid search stars supposedly courted at one point, wound up in the arms of Time Warner's (NYSE: TWX) AOL at a discount.

Let's face it: Most of the people logging hours on social networking sites usually have holes in their pockets. Despite their youthful ways and eventual earnings power, they're just not the ideal ad targets for high-paying sponsors. Dirt cheap display advertising campaigns to promote upcoming movies, shows, and CDs have some degree of branding appeal, but MySpace is an unlikely e-commerce hub for now.

When a social networking site tries to push the envelope -- like Facebook with its clever yet ultimately intrusive social ads -- the market has a fit

Are social networking websites waning in popularity? No. Will the niche ever be effectively monetized they way it is with high-margin dedicated search engines? No. Should investors who bought into a giant News Corp. just for the sake of MySpace bail? No, but they may as well either start tempering their expectations or get to know the rest of the company a little better, because that is where the bread and butter can be found.

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Longtime Fool contributor Rick Munarriz remembers when social networking really was a social network. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.