Pornography is a violation of Facebook's terms of service. Even nudity is forbidden. A Google search on Facebook porn doesn't turn up a lot of hits, just a few local reports.
Thanks to an inquisitive mind I am obliged to closely monitor, however, I can affirm it exists. I flagged the page I found, so it will be probably be removed. It's unlikely to be the only one however.
It's easy to imagine a value prop for FB porn. With automation, cheap labor, and freely available image content a small investment could produce millions of pages -- just as on the public web. The startup costs are even lower because an entrepreneur can leverage existing web oriented infrastructure.
Thanks to Facebook's "like" and "share" network a page can reach its target audience quickly. Even if an individual page has a short lifespan the collective will be long lived.
The revenue comes from exploitation of the vulnerable and gullible population that are attracted to these pages. Their information could be sold at a profit, and they would subsequently be "friended" by counterfeit people who will introduce further exploitation from financial frauds to retail child porn.
It's an "attractive" business model -- for a certain kind of entrepreneur. There are even financial incentives for Facebook, since this same population is likely to fall for a number of Facebook's legal exploitations.
Is this really happening? I would be surprised if it weren't, but I suspect it's still a small operation. Just like spam was once a tiny portion of the email stream and splogs were a tiny portion of blogs ...
Update 7/31/10: A milder but related operation is illustrated by large numbers of machine generated baseball player fan pages. They share identical descriptions, format, and all include wikipedia quotes. They exists to harvest "fans" for marketing and other purposes. They're consistent with Facebook's terms of service, but it's fundamentally the same business model as I've described for the illegitimate porn pages.
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