Despite the increasing popularity of social networking sites, Google (NSDQ: GOOG), Microsoft (NSDQ: MSFT), Fox Interactive and others are still having difficulty unlocking the platform’s potential ad revenue. Explaining its poor performance in Q4 last week, Google flat-out blamed its troubles on social ad inventory not paying very well, dragging down margins across the board. Although it didn’t identify any social nets by name, Google does have a $900 million ad contract with MySpace. And over at Facebook, Microsoft isn’t generating any windfalls from its 1.6 percent stake in its social net deal either. A WSJ piece points to analysts’ estimates that claim that the Redmond company is losing money on the deal. There’s a further implication that Microsoft has realized that its ability to wring greater revenues from its arrangement has spurred the company to make its $44.6 billion play for Yahoo (NSDQ: YHOO) right now; the theory being that Microsoft, which has a multi-year deal to sell ads across Facebook, can expand its ad base more efficiently by owning Yahoo.

Responding to WSJ’s contention about its return on social net ad sales, John Tinter, Microsoft’s GM for strategy and business development, says that the company’s ad strategy does call for a broader use of social net ads as part of packages. But he disputes that it’s losing money from its Facebook arrangement. However, Tinter’s a bit vague on the issue, saying that Microsoft has experienced “steady improvement” in that area.

Highlighting the fact that even the big names are not seeing revenue growth commensurate with social networks’ usage is not necessarily an indictment of these companies strategies, but more a matter sign of timing and the evolution of social net sites. At the moment, social net advertising is still pretty small compared to other online ad formats such as display and search. And as Facebook’s Beacon debacle loudly demonstrated, advertisers may be hungry to get their hands on users’ personal information, but they remain worried about a possible backlash, not to mention the lack of control over where their marketing messages will wind up next to.

But all that fretting is supposed to change this year, according to a report issued by eMarketer last month: the researcher projected that global ad spending devoted to social nets is expected to rise 81 percent, to $2.2 billion in 2008 from $1.2 billion last year.

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