Selling a service can become a winning proposition was unknown to the likes of Microsoft,Google,Yahoo et al who choose not to enter the Social Media. They took the well trodden path of choosing the products and services which were mainstream.
facebook and Myspace choose the different and now they are sitting on a huge break point. They have maximum active subscribers. Facebook ( 140 Million) and Myspace ( 120) Million. Although yahoo still leads in user engagement, ie the level of time spent by users on the site, but increasingly Facebook and Myspace are becoming just like portals. These social sites are having a number of other aspects built into it. Consider this facebook has almost 52,000 applications. That is huge third party content on the site.
Also these sites have now become astute marketers and are generating huge revenues by targetted advts. and running various campaigns and selling products and services through their sites.
The idea of social networking was unknown till a few years back but has picked up immensely and put these firms on the forefront of a tipping point. Shows how a breakthrough idea could create future Fortune 500 companies and failure to capitalise on the same by existing Fortune 500's may take them out of the league.