CNN Money used the number $10 billion when talking about the valuation of Facebook, the social network.There was a bit of joking in that. Yahoo! (YHOO) apparently considered a $1 billion bid less than a year ago. Google (GOOG) and Microsoft (MSFT) are considered buyers because Facebook has 30 million active users and none of these companies has a big social network like MySpace, the company bought by Rupert Murdoch’s News Corp (NWS) for $565 million.

The feeling is that Murdoch got a deal on the largest of the social network sites. But one industry estimate says that MySpace will only do $200 million in revenue this year. But, how can a property with 44 billion monthly page views bring in so little revenue?

The answer is that social network sites deliver an audience that its almost useless to online marketers. The people who go to sites like Facebook cannot be organized in any logical way as visitors to Yahoo! Finance or AOL Movies can be.

One of the dirty little secrets about the internet is that much of the advertising inventory is sold as remnants for well under $1 per thousand pageviews. The CPM that advertisers would pay to be on the front page of CNN Money could be closer to $40. But, a large portion of the advertising run online is dancing aliens selling mortgages. This is because much of the internet’s traffic cannot be organized and sold to highly targeted audiences. So, this inventory goes for a song.

Social network audiences probably carry the lowest value of any ad inventory on the web. An educated guess would be that if MySpace will do $200 million in revenue this year, Facebook might do $50 million. And, that is not likely to hit $500 million anytime soon, It may never happen.

Facebook’s lack of attractiveness to advertisers is its valuation Achilles Heel.

No one has bought the company because it is not worth much.

Douglas A. McIntyre can be reached at 24/7 Wall St.

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