Blogging, email, IM, and telephone make it easy to keep in touch with your real
friends. Social networks are hyped, but tend to have low value traffic because
they don't effectively separate signal from noise. The only people who have time
for them are people hawking crap, people looking to waste time, and spam bots.
Source - WebNewsPro - The Web's Largest Social Network
While this is quite true, and we do see a lot of spam and time wasters on Orkut, it still has a pretty big database of young people who know their way around the internet. There are enough of products / advertisers out that consider such an audience their target market.
Google should allow advertisers to advertise on Orkut through demographic targets and targeting on specific communities.
The problem with something like Orkut though is that its geographic reach is too skewed.
And there is also a lot of competition. Facebook seems to be the biggest rage currently around here. Of course the other thing about such networks is that very few have truly unique users. Users register everywhere and anywhere. Same is the case in Matrimonial Sites and Job Portals. There is little value to such a property then cause how can you differentiate yourself to sell better if everyone else has what you have?