eMarketer has revised its estimates for U.S. social network ad spending, now projecting advertisers will spend $1.4 billion to place ads on social networks this year, down from its original estimate of $1.6 billion.

According to eMarketer part of the reason for the revised estimates is due to the slowing economy, specifically for those companies who will cut experimental ad dollars first.

Another factor is, “social network sites are still trying to figure out what sort of advertising works,” said Debra Aho Williamson, senior analyst, who authors the social networking reports.

“Tapping into consumers’ conversations and spreading brand awareness virally has proven more challenging than companies originally thought.”

eMarketer has revised its forecast for the two largest social networks, MySpace and Facebook. Its original prediction said MySpace would bring in $850 million in the U.S. but that estimate has been scaled back 11.2 percent to $755 million.

At Facebook, advertisers will spend $265 million, a 12.9 percent drop from the previous forecast of $305 million.

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