All the recent privacy issues and rather shady dealings with Facebook have promted the development of a group of students who might have a better idea on how to do social networking. I for one am hoping they succeed. Facebook has some issues that need to be addressed. The most glaring that I can see is their policy of having rights to content that is posted. Such as pictures. This post on The Consumerist does a good job of summing up the T.O.S. at Facebook.
These students recently acquired full funding and as we speak are most likely hard at work developing what we hope will be a MUCH better social network than Facebook.
Recent news on the alternative to Facebook: Diaspora