Future of social network sites

Social networks are gaining a lot of attention from investors and media but hardly any one of them are profitable. Even companies like youtube.com and skype.com have proved to be bad investments for their acquirers as both of them have not generated enough profits to justify the price paid for them.

Facebook and mySPace are also facing decling CPMs and click through rates. In this scenario if these networks are considered businesses then their valuations should be based on some financial matrix. Facebook is recently valued at 15 billion while it has hardly generated 150 million in revenue.

In this scenario what is the future of social networks? Will they become symbol of another irrational exuberance or they will really become viable businesses?