Speaking during the company's third-quarter earnings conference call on Wednesday, Chernin said that FIM will miss its revenue target by about 10 percent.
The news once again highlights the continued uncertainty over whether social-networking sites like MySpace and Facebook will ever generate revenue consistent with their massive popularity.
Advertisers have shown concern about promoting their wares in social-networking sites where the content is created literally by millions of people and often can be of dubious taste and even illegal.
There are also questions about whether social networks as a concept are good advertising vehicles, considering that users of those sites are primarily interested in communicating with one another.
Acknowledging this, MySpace, Facebook and others have been experimenting with new advertising formats and approaches that will resonate more within the social-networking environment.
Still, Chernin went to great lengths to reassure News Corp. investors that the missed revenue target doesn't mean that FIM, and by extension MySpace, are in trouble. "This is a very healthy business with significant progress across multiple fronts," he said.
The shortfall is against what he called "very aggressive" projections of 80 percent revenue growth for the fiscal year, which closes at the end of June.
Taking that into account, coupled with "a tough economy," he characterized the missed revenue goal as "slight" and said that FIM is now "nearly a billion dollar revenue business."
Nonetheless, he also addressed head on the challenges of selling advertising for social networks. "Social media has only been around a few years and gaining market acceptance for any new category will always have its challenges," Chernin said.
"The online ad models that have driven the Internet economy in the past need to be refined for the social media universe. New methodologies are required, which we are actively developing," he added, mentioning MySpace's HyperTargeting, which matches ads based on members' interests, as stated on their profiles.
He acknowledged that "it's still difficult to quantify the economic value of a 'friend' in the social-media space" especially with advertisers accustomed to evaluating campaigns on TV and radio.
"We're working with those major brands and their agencies to educate, innovate and experiment in the social-media arena and develop the right set of metrics. We're making headway, but it's fair to say that it remains a work in progress," Chernin said.
Then there is the issue of competition in social networking, which is creating "an enormous amount of advertising inventory."
However, FIM will be "at the forefront" of efforts to develop the necessary tools to boost advertising. "We're incredibly optimistic about the future of social media and our role in shaping it," he said.
"We are very pleased with the performance of the FIM division and MySpace specifically, and confident in the continued growth in profits. Without a doubt we have challenges, but we know what those challenges are and we're addressing them and developing solutions to meet them," he said.