I think a large part of it was also the digital photo and smartphone revolution. Instagram did that a little better, but posting straight to Facebook was a little better than what... Photobucket? Personal hosting? Emails with mass CC? It just solved that problem so well for not only the big event pictures we'd traditionally throw in an album, but also adhoc slice-of-life moments.
It also gave that power to businesses, humanising them in a way that hadn't been possible before, and that's where the money came in.
Yes, precisely. This is my point entirely, that ego, vanity, pride, conceit and narcissism is what motivates these individuals to want and need to share personal details with complete strangers, and this is the entire point of Facebook, to beguile its members with a platform of opportunity to indulge in symptoms of personality disorder and character flaw.
What made Facebook great was that it encouraged users to share personal information (including pictures and bio items) and then made it easy for everyone to anonymously take part of this information.
You could look at pictures of your crush in cute outfits or co-workers in embarrassing situations. You could read about the layoff your ex' new partner had to endure. You could see where the cool kids had their coffee. All of this at any time of day, and nobody but you would know that you knew.
It's the ultimate low-key stalking tool and it was designed this way from the start, because early on they understood that's what people want.
I don't remember the exact quote but I do know one of the early decisions was that photos ought to be open by default and you shouldn't be able to tell who has looked at them -- in contrast to many other social networks at the time.