We’re hearing from sources close to social networking company MySpace that it expects to hit $1 billion in revenue this year, or at worst be within a hair’s breadth of that number. Meanwhile, MySpace executives say that they only see growth in revenue ahead, despite the wider downturn in the economy.

This is significant, because for the past two years, the conventional wisdom is that advertising has remained weak for social networks. But for MySpace, that’s not the case. The revenue compares to $300 million or so expected by competitor Facebook, which has passed MySpace in worldwide traffic, but has taken longer to monetize.

The $1 billion for MySpace is up from a reported $850 million last year, again according to sources close to the company. Rupert Murdoch, the chief executive of Myspace’s parent, News Corp. has declined to issue the numbers publicly.

We talked with Jeff Berman, president, sales and marketing at MySpace.com today, and he declined comment on any sales number. However, he did say that the company is on target to hit $1 billion in sales (he did not say by when exactly), and that it will do so quicker than Yahoo or Google did. Google took six years. MySpace is in its fifth year of existence. “There’s a lot of popping here,” Berman said. “We’re guardedly optimistic,” he said.

Facebook has struggled on the revenue side. It flubbed its “Beacon” program, for example. That program sought to target users with ads based on what their friends were doing on the network, but got slammed hard by the media because of privacy concerns before it really got off the ground. Chief executive Mark Zuckerberg has said that it might take three more years before the company finds a big-time business model. Facebook has said it is focusing on traffic growth.

MySpace has been helped by the guaranteed revenue deal from Google, which provides search for MySpace. Also, it uses its own proprietary targeting technology to mine its users surfing and click habits, in order to send ad messaging to its users “at the right time, in the right way,” says Berman.

MySpace knows for example, that it has more active Nascar enthusiasts than even Nascar.com does, Berman said. MySpace also says that 40 percent of all mothers online in the U.S are using MySpace every month. It makes money by being able to target these users with specific offers. Under its myAds program, released last week, local advertisers can pay $25 or more to serve ads to users based in a certain zip code.

What about the downturn? Berman said that he’s hearing marketers are cutting back their overall ad budgets, but moving a greater share of their budgets online, where they apparently believe it will produce a better return on their investment. Also, some marketers are near to maxing out on their search engine campaigns, and are looking instead to large sites to target masses of people — and here MySpace is a leading candidate, Berman said.

All this points to ongoing strong revenue growth. “We continue to see year over year growth in nearly every category,” Berman said, adding that the company has so far not seen any change since the end of September, when the stock market plunged. The growth is being driven by new brands launching campaigns on MySpace, including Toyota, McDonalds, State Farm, Sony Pictures — all of which were launch sponsors of MySpace’s new music feature, MySpace Music. Computer maker HP also recently signed a big deal with MySpace last week.

Berman also said the company continues to see its traffic climb.