A year ago, a few things were apparent in the fledgling phenomenon of massive social-networking sites.

Friendster, once at the top of the heap, was struggling--late in 2005 it was rumored that the site might go up for sale. But at the same time, competitors began to rise quickly. MySpace.com, a recent News Corp. acquisition that was best known as a hub for teenagers and unsigned bands, began a rapid climb to the top of the Web's pecking order.

And Facebook, started by then-Harvard student Mark Zuckerberg as an alternative to his school's paper directory, broadened its base as it accepted registration from corporate as well as university e-mail accounts. At the same time, international rivals like South Korea's Cyworld ambitiously took aim at the lucrative American youth market.

Soon enough, the growing prowess of online social networking began to attract the attention of the U.S. government--for a variety of reasons. In May, Congress considered the possibility of requiring libraries and schools to ban minors from accessing social-networking services like MySpace and Facebook. Several weeks later, some members of the House of Representatives introduced legislation that would require social-networking sites to log user activity--logs that would be turned over to aid criminal investigations.

Meanwhile the dialogue about social networking suggested that its future remained up in the air. At its Global Internet Summit, investment firm Piper Jaffray named the phenomenon one of the top shapers of the Internet as we know it. But at the same time, many young Web users started saying they were "over" MySpace and thought it was a passing fad. It was still unclear, too, how best to make social-networking sites profitable.

But the roughest bumps in the road were yet to come for MySpace and Facebook, the two biggest names in social networking. In July, MySpace had recently surpassed Yahoo Mail as the most-visited site on the Internet, which made it all the worse when a California heat wave knocked out the company's servers and completely disabled the site for as long as 12 hours--an incident that angered its largely young and arguably impatient user base.

And in September, just as a new class of college freshmen eagerly signed onto Facebook, the service launched a feature called the "News Feed" that was quickly assailed by members for being "stalker-ish." In response to the negative feedback, Facebook's executives issued an apology and added new privacy controls to give users more leverage over the log of profile changes.

As the year winds down, social-networking sites are experiencing a new set of problems. The child safety stories that dotted the news this summer have largely been replaced by a potentially bigger issue: copyright infringements. Several weeks after MySpace announced that it would be cracking down on the use of copyright songs in user profiles, Universal Music Group slapped the site with a lawsuit for turning a blind eye to the presence of pirated content.

It appears that the suit will be settled, but MySpace is nevertheless left vulnerable at the end of a year in which, at times, it seemed invincible. Will the biggest player in social networking fall to the demands of the entertainment industry--or to the threat of security vulnerabilities--leaving room for others like Cyworld, Bebo and Imeem to take its place? Perhaps 2007 will provide some answers.

--Caroline McCarthy

2006 Highlights

LinkedIn to be profitable

blog Subscription fees push business networking site into black. No further investment funding needed, company says.

MySpace growth continues amid criticism

Popular site is signing up new members at record pace, but remains target of concerns regarding safety of younger users.

Facebook goes corporate

Social-networking site expands membership to select group of big-name companies such as Apple, plus Teach For America.

Hacking MySpace for fame and fortune

A growing number of enterprising people have found a way to exploit the hugely popular social-networking site for promotional ends.

Lawmakers take aim at social- networking sites

Proposed law would cordon off access to sites such as MySpace and LiveJournal from schools and libraries.

Social networks--future portal or fad?

Investors and execs can't decide if MySpace and Facebook are next-generation portals or flash-in-the-pan communities.

Congress targets social-networking sites

Lawmakers have been trying to get ISPs to retain data on customers. Now Congress is turning to sites like MySpace.

MySpace feels the heat

California power outage throws the social-networking site for a loop. Can it improve its reliability?

Korean social-networking site hopes to nab U.S. fans

Hugely popular in its home country of South Korea, Cyworld is determined to bring its success to the United States.

Friendster scoops up $10 million in funding

Investment could help the social-networking pioneer recapture its luster and regroup amid a rise in competitors.

Facebook's Zuckerberg: 'We really messed this one up'

blog Users of college-oriented social-networking site denounce "news feed" service as invasive and "stalker-ish."

MySpace drawing 'older' visitors, study finds

Once the dominion of the teen set, site now sees majority of U.S. visitors from the 35-or-older crowd.

Universal sues MySpace for copyright violations

But MySpace disputes the music group's charges, saying it has been working to protect artists.