At MySpace, they use the F-word a lot.

Facebook may have more syllables than many expletives, but at the offices of what was once the world's ascendant social network, it is pronounced with all the malice of a four-letter word.

In the space of a year, MySpace's greatest rival has gone from being a relatively unknown site used by Harvard students to the universal byword for 'social networking', a technology colossus with 37 million users, an estimated value - based on a recent stake bought by Microsoft - of $15 billion and the ability to instil fear if its 23-year-old chief executive, Mark Zuckerberg, so much as utters words like 'personalised ads'.

All of which, one imagines, must rather rile Chris de Wolfe, the co-founder and chief executive of MySpace. Mr de Wolfe's site, after all, laid the ground rules for social networking, and has quietly built up a global subscriber base of 76 million, according to Nielsen/Netratings - comfortably more than twice the size of Facebook's. It now also has revenues more than 30 times the size they were when it was bought by News Corp, the parent company of Times Online, for $580 million two years ago.

Is he not a little irked at the success - and the seemingly undimmed limelight - this young pretender is enjoying?

"Facebook is more of a utility whereas MySpace is more about self-expression - our site is about connecting people and culture and content," he says. "Our users love the ability to customise their pages. Every profile on Facebook pretty much looks the same."

The answer goes to the heart of social networking's revenue model, which is advertising-based, and the success with which the likes of MySpace and Facebook are getting marketers to part with their growing online ad budgets.

Both MySpace and Facebook allow their users to set up a profile, upload content such as photos, videos and music to their page, and share this content with other users, typically called 'friends'.

Much has been made of the rich trove of personal information such sites hold about their users and which, they say, can be used to target adverts more keenly. "If you say on your profile that you like skiing, the show 24 and the band Snow Patrol, we'll have a better chance of serving an ad that's relevant to you," Mr De Wolfe says.

The challenge executives at social networking sites face is in working out how best to take advantage of this information.

Facebook's most recent solution, announced in November, was to allow its users to do companies' marketing for them, by letting companies attach adverts to messages sent between Facebook users when, for instance, they made purchases on other sites.

The feature, called Beacon, was billed as the next evolution of 'word-of-mouth' marketing, until users realised that the messages would be sent without their consent. A wave of protests from privacy campaigners followed, until Facebook was forced to change the feature, meaning that any advertising revenues that flow from it will be significantly reduced.

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