[kedean]

One could avoid privacy issues by not collecting any information outside of email and chats, I would imagine. You don't HAVE to collect lots of user information.

As for porn, why does a social network have to allow embedded images? If it's mainly a chat service, there's no risk. I suppose someone could use your network as transport for links to outside content, but that's pretty unlikely and it's a stretch to say the network is responsible at all. You could also disallow hyperlinking.

Of course, both of those fixes make the system pretty damn hard to monetize, which I think is the biggest issue.