It’s not obvious to users what Facebook’s business model is, but it’s likely something to do with advertising. Facebook knows a great deal about their users and can target advertisements to them in a way that even Google’s knowledge of users’ searches can’t get close to.
Facebook has a couple of things it must do to ensure that users keep using it’s social networking services though. The more people link with each other and share the more data there is for all of us to sort through. Not only does the mountain of data grow, bogging down server farms, but users are forced to filter it all and they don’t have their own server farms to help. At some point sorting it all becomes a pain and you wind up blocking your more chatty friends.
One simple solution would be to allow users to add tags to their pictures, status updates, and posts. Just think of it, your friends add a new picture of their lovely baby, and naturally they choose some tags, like “baby”, “boy”, “our treasure”. They’re making the search easier for Facebook, but their enabling their friends and family to create albums, of all of their favorite pictures or news items. While grandparents will quickly want to create a filter showing baby pictures of all of their grandparents, their childless friends, sick to death of pictures of someone’s naked child with spaghetti sauce all over his face can safely filter them out and still catch updates from their friends.
This simple, well tested feature, is likely fairly easy to implement and offers incredible functionality to the social media platform, including much more targeted advertising, which is exactly what Facebook’s customers, not the users, but the people buying ads and paying the bills, really need.