When it comes to how much credibility I think a publication has, it only takes one colossal lapse in journalistic integrity for me to lose all trust.

In general, I’ve usually found FastCompany to be a fairly decent publication.

While its articles are often laced with a little bit of kool aid, a sip of kool aid now and again never hurt anyone.

But FastCompany‘s latest cover story about hyped Silicon Valley startup Ning entitled “Ning’s Infinite Ambition” by “investigative journalist” Adam L. Penenberg is little more than a fluff piece in the same mold as Sara Lacy’s BusinessWeek article on Digg and Kevin Rose two years ago.

Ning is certainly a viable candidate for such a piece as it’s one of Silicon Valley’s hottest startups.

One co-founder, Marc Andreessen, helped begin Netscape and is Valley royalty. The other, Gina Bianchini, looks decent in a tank top. The pair recently closed a $60m round of funding at a pre-money valuation of $500m.

So what does Ning do? If you’re a kool aid sipper, it is an incredible platform that gives everybody the ability to set up a fully-fledged social network. If you’re a veteran of Bubble 1.0, Ning is Web 2.0’s answer to eGroups.

Penenberg makes it clear that he’s a kool aid sipper right from the start. He opens his article with the following paragraph:

“Here’s something you probably don’t know about the Internet: Simply by designing your product the right way, you can build a billion-dollar business from scratch. No advertising or marketing budget, no need for a sales force, and venture capitalists will kill for the chance to throw money at you.”

He goes on to explain that the secret to building a billion-dollar business from scratch is a “viral expansion loop.

What’s that? Penenberg reveals the amazing secret:

“It’s a type of engineering alchemy that, done right, almost guarantees a self-replicating, borglike growth: One user becomes two, then four, eight, to a million and beyond. It’s not unlike taking a penny and doubling it daily for 30 days. By the end of a week, you’d have 64 cents; within two weeks, $81.92; by day 30, about $5.4 million.”

Of course, this engineering alchemy called a “viral expansion loop” is just a sophisticated phrase for “viral growth.”

Predictably, Ning is, according to Penenberg, the perfect example of this engineering alchemy. After all, Ning’s business model is based on “incorporating virality into the functionality of the product.

It’s working wonders. Ning currently hosts 230,000 social networks and predicts that by 2010, “it will host some 4 million social networks, with tens of millions of members, serving up billions of page views daily.

Of course, despite Penenberg’s talk of how “profound, powerful, and potentially profitable” companies like Ning are, there is no discussion of how many active social networks and members Ning has, nor is there any discussion of Ning’s financials.

Most of the discussion isn’t discussion at all – it’s hype. Penenberg devotes a significant amount of the article to explaining the wonders of “viral expansion loops” as if nobody had ever heard of the concept of viral growth before.

And he, not surprisingly, can’t help but detail the incredible valuations received by startups such as Facebook and Slide – companies that also thrive on “viral expansion loops.

Beyond simply providing hype in written form, Penenberg ventures into territory that I would opine calls into question the credibility of the entire article. When he starts talking about numbers, he seems to think that everything is infinite.

For instance, he projects that Facebook will have 200 million users by the end of the year without apparently taking into consideration that Facebook, like MySpace, will inevitably see slower growth as it acquires more of its potential market.

And he predicts that Ning will be “poised to claim a nice slice” of the $26.2 billion domestic online ad market with its “‘billions’ of predicted page views.

Of course, the notion that Ning is going to be a hot target for advertisers seems quite tenuous, especially when one considers that ad inventory on social networking services is heavily discounted due to monetization issues.

Ning isn’t even considered a top-tier mainstream player and currently relies on nothing more than Google AdSense to serve the targeted ads that Penenberg finds so amazing.

When it comes to providing some balance, Penenberg essentially devotes a whopping two paragraphs to the task.

He quotes NYU professor Nicholas Economides, who reminds readers that “being big doesn’t necessarily mean you will make a profit,” and finally admits that other popular Web 2.0 services “may have huge paper valuations, but none has a revenue model embedded in its core business.

Unfortunately, Penenberg goes on to destroy whatever credibility he had left by informing readers that Ning is different:

“It displays the kinds of ads Web surfers are accustomed to seeing on blogs, news sites, all over the Internet, especially tailored to their particular social-net niche. Extreme skiers see ads targeted to extreme skiing, and so on. Right now, Google places Ning’s ads, but eventually, Bianchini and Andreessen plan to serve their own. And even today, if you want to control the ads on your Ning network, you can pay as you go for the infrastructure — for a monthly fee of $20. About 3% of group leaders chose this option. Either way, Ning makes out.”

And he ends with this note:

“By the time Facebook — or anyone else — could do that, Ning may well have ridden its double viral loop to impregnability. Because once it hits critical mass, the road is paved.”

“Then no one can stop it.”

I’m skeptical about Ning and have previously voiced my opinions on why it isn’t that special.

I still see it as little more than a Web 2.0 version of eGroups, which was purchased by Yahoo for more than $400 million in Yahoo stock at the height of Bubble 1.0.

Clearly, I don’t expect everyone to be as skeptical as I am but even others have commented on how incredulously unbalanced FastCompany’s article is.

Rafat Ali, editor of PaidContent, is someone that I usually find to be a level-headed reporter of news related to online content.

The fact that he called FastCompany‘s article “the biggest piece of Turducken shaped in the form of a cover story” says a lot.

One PaidContent commenter calls Penenberg’s article “PR masquerading as journalism” and another states “Journalism it isn’t.

I’ve recently discussed ethics in the blogosphere and questioned the journalistic integrity of one prominent blogger. It would therefore be unfair not to criticize FastCompany for experiencing what I feel to be a damning lapse in journalistic integrity.

While I know of no evidence indicating that Adam L. Penenberg has a conflict of interest that would provide motivation to write a fluff piece for Ning, I have no qualms stating that his article is completely one-sided, poorly-researched and excessively laden with meaningless, extravagant statements.

It is therefore, in my opinion, of little value to FastCompany readers and had no business being published in the form it has been.

As Rafat Ali points out, one need only look at some of the words and phrases Penenberg chooses to see the red flags:

viral expansion loop“, “engineering alchemy“, “self-replicating, borglike growth“, “business accelerant“, “automagically“, “ever-expanding commercial universe“, “grand visionary“, “effervescent CEO“, “serious money“, “stackability“, “cyber equivalent of introducing standard railroad gauge during the industrial revolution“, “double viral loop“, “phantasmagorical growth“, “swells like a river fed from an ever-growing number of tributaries“, “all but unstoppable“, “ridden its double viral loop to impregnability”.

Maybe Penenberg was infinitely excited. Maybe concepts like viral growth were new to him and he was infinitely inspired. Maybe he wanted to write an infinitely entertaining article.

Whatever the case, I think FastCompany was infinitely foolish for publishing such a fluffy piece.

While I am not a FastCompany subscriber and can’t honestly say that it’s a magazine I buy religiously, I have occasionally picked up a copy and have enjoyed reading some of its past articles.

After reading Penenberg’s “article,” I’ll have to think twice about picking a copy up in the future.