One of the most popular social networking sites on the Web, MySpace.com has just launched an initiative to capture and collect personal information from the profile pages and blogs of its one hundred-ten million active users, and then use that to target ads. This news was announced to investors on September 18th during the quarterly investor conference, according to a company spokesperson. According to the spokesperson the company hasn’t issued a statement about this news to press and would not comment further.

This hasn’t stopped others in the industry from speculating about what this change could mean for MySpace and online advertising as a whole. MySpace may be able to nearly double its revenue, from $40 million a month to $70 million a month due to the data mining project according to Perry Solomon, VP of business development and general manager of data mining services provider Media Solutions, FAST Search and Transfer.

“We’ve moved from the ‘build it and they will come’ stage to the ‘they are here, let’s understand what they like and deliver it while making money’ stage,” Solomon said. He said that MySpace may use targeting tools to add value to the user experience. He also suggested that users should have the choice to opt out if they don’t wish to participate. This will help to maintain a good level of user control and privacy.

“Members of MySpace communities won’t have a problem with this,” Solomon predicted. “In fact, they will probably benefit. If they are willing to be marketed to, provided the marketing is relevant, this all becomes part of their conversations and adds value to the experience.”

There is an enormous amount of insight from the collective user data on social networking sites, like MySpace. The information users post about themselves from their likes to dislikes to how and where they spend their time and money, can all be mined and used for improved targeting, according to Solomon.

“MySpace’s strategy, along with the other social networking sites, is to move from being a content-aggregation site—which is what the social networking sites are—to a hub of content, community and commerce,” he said. “Today, they provide tools and environments to build community and aggregate content. Now the challenge is to mine that community and add value to the experience by adding information to help members do more.”

For media companies with loyal user bases and great content, there exists a great opportunity to build stronger communities around users, and then monetize those communities by delivering relevant, targeted advertising, content promotions and offers, upsells to subscriptions or premium offers and related e-commerce offers. Solomon said that there should be no challenges, provided that the social networking operators deliver relevant messages.

A key requisite for these social networking sites is to have a strong technology foundation that can draw insight from the community members’ feedback, their collective behavior across the community, and deliver targeted, relevant advertising, offers and introductions.

“Users will benefit if they receive information which is relevant and addresses their needs,” Solomon said. “If the targeting is effective, users will see messages that address what they like, messages with which they can engage.”