Except that it's not. The vast majority of what Facebook does can be done without Facebook. The essential problem now is that there are large numbers of people who have only ever known Facebook and are unaware of how to accomplish those things without it.
Except that it is. Where else than facebook.com can I go to connect with 80%+ of my coworkers, family, and friends?
Like a stereotypical engineer, you're thinking about the software. People don't use Facebook for just the software. They use it for the network.
> They've got a captive audience. Like it or not, the service that Facebook provides is unparalleled, and short of direct, tangible harm, it's not enough for most people to give that up.
I think it's mainly unparalleled from the advertiser perspective, but not the user perspective. I think network effects aren't as compelling to users as is often assumed.
I think Facebook's privacy terribleness will be part of its undoing, but only part. Other things, like fashion, user fatigue, and potentially new regulatory antitrust oversight (to block acquisitions) will be significant factors, and they'll all reenforce each other.
Tell that to the carcasses of Facebook's competitors.
They've got a captive audience. Like it or not, the service that Facebook provides is unparalleled, and short of direct, tangible harm, it's not enough for most people to give that up.