Even if privacy weren't a concern, I don't see the point in using either one. People have email. If I really need to talk to or share something with someone, I'll email them. Or occasionally, IM them. Or maybe even call them. Or if they're nearby, maybe go have lunch with them. I don't need to share everything every day at all times with everyone. Nobody is that interesting. Nobody is that interested. And nothing is that vital.

ACLs (Access Control Lists) are the real benefit that social networks give. It's a system where loads of people already have an account, so it's easy to share things (e.g. photos) with a limited set of people. Obviously you can ask people to sign up for an account on <site where you photos are>, but asking people to sign up for Yet Another Web Account just seems 'dirty.' You could host it somewhere with a single password, but then it's hard to revoke access, or sent certain sets of photos to certain people. You could have per-album passwords, but now people have to remember (or write down) a list of passwords and map them to the albums that they are associated with.

A lot of people have posted here about alternatives that retain privacy, then others lament "who would do it? ... could a start-up succeed?"

There is an alternative -- on the horizon, anyway -- that's all about privacy. You don't have to choose between privacy from your community and privacy from a faceless corporation.

The FreedomBox project -- http://www.freedomboxfoundation.org, inspired by Eben Moglen, who helped write the GPL -- aims to create a network where users own their own data. If you've used, say, Wikipedia or a site run on Linux, you know how projects based on his vision can work in time.

It's not ready here and now, but this community can help contribute to it.

One component to FreedomBox is to replace many current "cloud-based" services which gather and store personal data with peer-to-peer versions where you own your data on your FreedomBox.