This article was originally published by SmartMoney.com

1. "We were in the right place at the right time."

In the hit movie The Social Network, a college student dumped by his girlfriend reacts by building a crude precursor to "Thefacebook" website. And while Mark Zuckerberg, the entrepreneur portrayed, has said the girlfriend "doesn't exist in real life," the success of his invention is anything but fiction. Facebook has 900 million regular users, up from 500 million two years ago, and is now the most visited site in the U.S., according to data tracker Hitwise.

While social networking wasn't new when Facebook appeared in 2004, industry observers attribute its success to a mix of luck, ambition and strategy. "Mark had all three in spades," says David Kirkpatrick, author of The Facebook Effect. By initially limiting access to students from select colleges, Facebook (which declined to comment on much of this article) could choose where and when to roll out, protecting it from too rapid growth. The early requirement that people use real names was also a boon. "There was an appetite on the Internet to be yourself and connect to your real friends," says Kirkpatrick.

2. "We know where you go online..."

In its seven years, Facebook has evolved quickly, adding features like instant messaging and news feeds. But critics say some developments can compromise user privacy. For instance, you can share online content with Facebook friends using the ubiquitous "Like" button. But press it or not, if you're logged in to Facebook while surfing, it will know when you visit any site with these so-called social plug-ins, says Nicole Ozer, a policy director at the ACLU of Northern California. "Facebook can essentially track you around the Web," she says. Facebook makes all such policies known to users, but critics wonder how many people are paying attention. Responding to a letter from privacy groups last year, Facebook said it stores users' Web-surfing data for no longer than 90 days.

3. "...and we hope you don't mind being tracked offline, too."

In August, Facebook launched Places, a tool that lets you "check in" at real-life locations, such as restaurants and concert venues, with the help of the GPS on your smartphone. The idea: to let friends know where you are. While 18% of smartphone owners use location-sharing services, according to a Pew Internet & American Life Project, critics warn they can make users vulnerable. Privacy experts cite two problematic Places features: One lets users register virtually any location with the service, even someone else's home or office; the other lets friends check you into locations unless you disable the setting. That means other Facebook users may know where you live or where you are, even if you haven't posted that info yourself. Kurt Opsahl, a lawyer with the Electronic Frontier Foundation, encourages users where possible to control the settings that allow for such location updates.

4. "Your account isn't exactly secure."

On social-networking sites, it's increasingly common for scammers to steal passwords and other sensitive data by imitating trusted sources, a practice known as phishing. Facebook is now the second most targeted brand on the Internet, according to monitoring service PhishTank. One scenario: An impostor uses your account to message your friends to, say, ask for money, claiming it's an emergency. According to David Ulevitch, CEO of Internet-security service OpenDNS, people are especially vulnerable on social networks, because there's a natural tendency to trust the sender. "It's not like getting spam in your e-mail for Viagra," he says.

Phishing could become an even bigger problem on Facebook as more users play online games, purchasing virtual goods and currency via credit card. Stolen card data is lucrative, says Chester Wisniewski, security adviser with antivirus firm Sophos. If you make purchases online, he says, use a credit instead of a debit card, since it can be easier to reverse fraudulent charges. He also recommends password-encryption programs like LastPass.

5. "If it feels addictive, it probably is."

Randall Sokoloff of Oakland, Calif., joined Facebook to make new friends. It worked. Within a month, he had 175, but the site had become an obsession. Sokoloff says he logged on to Facebook as many as 20 times a day. After discussing his habit with a therapist, he eventually managed to take a break: "It's like this umbilical cord that keeps you hooked into the computer," he says. Sherry Turkle, MIT professor of the social studies of science and technology, says some users struggle with living up to the tailored version of themselves they present online. For others, she says, "stalking" leads to burnout, since Facebook makes it easy to spend hours scouring others' pages. According to Michael Fraser, a clinical psychologist in New York, no official diagnosis exists for Internet addiction, but users should seek help if work or school performance suffers or if they experience mood swings when away from the computer.

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