If Google can’t, who can?

WIRED: Lots of smart people are trying to figure out how to monetize social networks. And it’s no easy feat: Even if millions of people log on to Facebook twice a day, they aren’t there to buy sneakers, they’re there to connect with friends.

“I don’t think we have the killer, best way to advertise and monetize the social networks yet,” said Google co-founder Sergey Brin, on a conference call in January. “Some of the things we worked on in fourth-quarter didn’t really pan out and there were some disappointments there.”

Brin ought to know. Google has an agreement with MySpace, which has proven mostly disappointing. Under the deal, Google will serve ads on MySpace through the second quarter 2010. In return for the privilege, it will cumulatively pay the social network $900 million as part of a revenue-share agreement. Here’s the problem: If Google doesn’t make enough money over MySpace to meet the minimum revenue-share requirements, it has to dig deep and make those payments, anyway. And thus far, the deal has shaved roughly 1.5 percent off the company’s gross margins, according to estimates from Bernstein Research analyst Jeffrey Lindsay.

So if Google can’t make a buck off social networks, who can?