Is Facebook Overrated?

The cool kid on the Web has everyone's attention, but the social-networking site still needs profits to match its promise

TIME Photo-Illustration

Whether you realize it or not, social networking is something you do every day. Each time you tell a friend about a good movie, bore a neighbor with pictures from your kid's birthday party or catch up on gossip at work, you are reaching out to people you know to share ideas, experiences and information. The genius of social-networking websites such as MySpace and Facebook lies in their ability to capture the essence of these informal exchanges and distill them online into an expanding matrix of searchable, linked Web pages.

Nearly half the people who went online in the U.S. in...

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