Is a social network really an ad platform? Consider the nature of the site before you buy.

In an industry so fixated by numbers that new statistics are invented on a daily basis, it's easy to lose sight of a fundamental question: What is it?

The question of taxonomy, identifying and labeling a particular player or group of players in the digital space, is one of the first queries put to any new entry. But somehow social networks, perhaps buoyed by a meteoric rise in popularity, have managed to skirt the fundamental question.

Long the darlings of Silicon Valley, sites like MySpace and Facebook have presented the world with nothing short of a phenomenon -- and advertisers with the promise of a massive audience with members who are both highly engaged and quick to reveal personal details about themselves.

With the triumvirate of scale, engagement and a richness of user data not seen elsewhere, it's little wonder that ad agencies have touted the virtues of those sites as the next best thing when it comes to ad platforms. Add to that the fact that virtually everyone working in interactive seems to have at least a MySpace and Facebook profile (many more belong to so-called niche social networks as well) and the case for social networks would seem to be a no-brainer.   

But social networks simply aren't advertising platforms, according to Greg Smith senior partner and COO, Neo@Ogilvy.

"An audience doesn't equal an ad platform," Smith said at ad:tech San Francisco, literally across the hall from legions of vendors shilling the exact opposite message.

Though he may be outnumbered, Smith might not be wrong. Last month, The Economist ran a story on how social networks, which had received high praise from advertisers throughout 2007, still suffer from an inability to find a monetization model commensurate to their total number of page views. Google, too, has grumbled about social networks, and speculation has run rampant that the search giant is looking for a way out of its deal to sell inventory for MySpace.

So what's the problem?

"Advertisers are quickly strangling the golden goose," Smith said, pointing out that users are being hit with ads left and right at a time when they're most interested in community.

For Smith, advertising inside of a communal environment isn't akin to buying media in entertainment or information-based mediums because users simply aren't keen to hear a sales pitch. 

While Smith's assessment may not match the rhetoric of those working feverishly to sell inventory in the space, the social networks themselves do seem to be taking note, albeit with different results.

At Facebook, which has come on strong in the last year to challenge MySpace for the leader's spot, the battle plan has been to leverage the wisdom of Google refugees to jumpstart an entirely new kind of advertising model. Throughout the spring, Facebook has been working hard to lure away top talent from Google, most recently bringing Sheryl Sandberg and Ethan Beard on board to help. 

By contrast, MySpace has seen a little more turmoil, as its corporate masters have increased the demand for greater revenue. Michael Barrett, the former CRO of MySpace left the company (some say he was forced out) just as the site launched the Fox Interactive Media Audience Network, a kind of hybrid ad network containing smaller verticals developed out from MySpace's niche communities.

But Facebook's attempts to poach Google executives and MySpace's constant reshuffling, may still miss the larger point.

At their core, social networks are closer to a telephone conversation or a meeting in a coffee house than reading a newspaper or watching TV. For Smith, that means sites like MySpace and Facebook are probably good places to deliver marketing messages, but not specific ads. Precisely what that means isn't certain, but according to Smith, social networks are in danger of being destroyed by salvos from Madison Ave. His advice: Take a step back and figure out how the brand can participate in a new kind of community experience and leave the impressions to publishers.

Michael Estrin is associate editor at iMediaConnection.