Everything was going fine for the web — the financial world had been unwinding its overleveraged excesses for nearly a year without nary a ripple into Silicon Valley — until the launch of HoffSpace, a social network revolving around the oogachaka-ing, burger-wagging actor.

Some bloggers called it a bizarre nightmare. Others decried it as the end of social networks. They were probably joking. But they were right.

Hoffspace showed once and for all what the web sector had fought so hard to admit: These social networks had finally expanded a niche too far. No longer was it possible to argue that one day social networking sites would be anywhere near as good at making money as they were at expanding, fractal-like, into a grey goo of trivial matter.

Social networks spent too much time trying to build audiences without building a solid business model. The thinking was, let thousands of startups innovate in thousands of ways and one of them will stumble onto something big. The way eBay did with online auctions, or Google did with a better search engine.

But even the site voted most likely to succeed is still punting when it comes to financial success. Facebook CEO Mark Zuckerberg told a German paper this week that the site won’t have a business model for three years. “Growth is primary, revenue is secondary,” he said. On the face of it, that statement isn’t absurd. But coming last week, it sounded blindly out of touch. Facebook will surely survive, but smaller sites looking to it as a role model probably won’t.

This was the week when the Internet sector realized that not only are the good times over, but that much of the room we had for innovation is also gone. The time to experiment around with big, audacious ideas is passing. The invoice for that luxury is now due, and companies will have to either pay up or be so well-funded, like Facebook, that they can still afford tinker a bit. Money is what everyone is expecting from startups, simply because there is suddenly so much less of it around.

Of course, one thing that would help the sector would be if a major social networking company were to give enough of a peek into its books to show it has healthy cash flows, even a robust operating or net profit. But sites like Facebook and MySpace have been suspiciously shy about their financials so far, so that’s not likely to happen.

Many of these sites — focused on social networks or widgets or other mere embellishments to the web that emerged over the past few years — aren’t going to make it. Some with a smart focus, like LinkedIn, will muddle through. A few will be bought out cheap; others will live on as labors of love.

This is the destructive part of that celebrated and magical creative-destruction formula. A lot of areas in tech are probably going to find ways to keep growing, if more slowly: mobile advertising, perhaps, or cheaper, more efficient on-demand software.

LinkedIn, the social network for careerists, whose $53 million funding round in June valued the company at $1 billion, has agreed to swap content with business news broadcaster CNBC.

The deal, announced Thursday, will feed CNBC’s articles, data and video to LinkedIn’s 27 million users, while allowing CNBC to tap LinkedIn users as participants in surveys and on-air question-and-answer sessions with reporters and newsmakers. CNBC.com, the network’s online unit, will integrate LinkedIn’s network functions.

The agreement extends CNBC’s audience at a time it is seeking to fend off a challenge from the Fox Business Network launched earlier this year by Rupert Murdoch’s News Corp. LinkedIn, meanwhile, has seen rival social network Facebook evolve from a refuge for college students to an online site that increasingly accommodates mid-career professionals.

The tie-in is the latest effort by LinkedIn to broaden its content through media partnerships. In July, LinkedIn cut a deal that gives users access to personalized industry news from The New York Times that can be shared with a social network.

In June, LinkedIn nabbed a $53 million series D venture found that implied a $1 billion valuation. At the time, Chief Executive Dan Nye told CNBC that the company “very likely” will stage an initial public offering, but at a price far beyond $1 billion.

LinkedIn, based in Mountain View, California, is backed by A-list venture capitalists and angel investors, including Bain Capital Ventures, Sequoia Capital, Greylock Partners, Bessemer Venture Partners and Marc Andreesen, founder of Netscape.

Mr. Nye took over as chief executive in February 2007, replacing founder Reid Hoffman, who remains as chairman. Mr. Nye is a veteran of consumer products company Procter & Gamble and finance software maker Intuit.

In 2007, Microsoft invested $240 million in Facebook that implied a $15 billion valuation for that social-networking site. That deal, however, was considered a strategic investment for Microsoft and made the Redmond, Washington, company the exclusive third-party advertising platform for Facebook.CNBC is a unit of media, financial and industrial conglomerate General Electric.

Business social network LinkedIn today revealed further details of its partnership with global website BusinessWeek.com.

Business Week - working with corporate intelligence company Capital IQ - will provide company data for LinkedIn’s new company profile pages, which were announced earlier this year (NMA 25.03.08).

BusinessWeek.com has added a feature called Company Insider, through which users see whether their contacts have appeared in Business Week
articles. This represents one of the first applications to go live on LinkedIn,

“These new features expand the impact and reach of our content to both BusinessWeek.com’s 8m unique users and LinkedIn’s network of more than 20m registered professionals,” said Roger Neal, senior vice president and general manager of BusinessWeek Digital.

“We are pleased to be working with LinkedIn to offer these valuable new tools to business professionals.”

LinkedIn came up with a fresh new homepage this week, and with a fresh new member, as Bill Gates gave up his Facebook account and joined the 19 million LinkedIn users in an unusual manner, by posing a question on his new favorite community site, asking for suggestions to encourage young people to pursue careers in science and technology.

What’s the connection between LinkedIn’s latest features and Gates’ “divorce” from Facebook? Obviously, Facebook! While still trying to catch up with its rival, LinkeIn has been also working on making the “staying” more enjoyable for cyber-visitors, through a status feature similar to that of Facebook, and by turning Facebook’s most popular user into a new “acquisition”, as strange as that may sound.

LinkedIn is currently submitted to a makeover meant to re-boost the site’s positions compared to its rivals. A good way to start was to personalize the user interface with a series of modules that allow users to organize their information on the profile page and keep their friends updated with whatever they are up to.

Gates’ presence only made things better for LinkedIn, as his profile became the most searched profile on the site. This time however, the philanthropist won’t have to worry about getting suffocated with too many friend requests, as LinkedIn will block friend requests. After all, they wouldn’t want to lose their most popular user like Facebook, would they?

At the end of the day, LinkedIn is working on improving the time people spend on the site, which allowed Facebook to be one step ahead, at least until now. The task is a difficult one, considering the differences between the two rivals. LinkedIn has an average of 6 and a half minutes per visit, while Facebook has 21 minutes. If we think of it, Bill Gates’ new account could give them a little push, but the new design should have much more to do with a future success.