1. How do social networking sites work? What has contributed to their immense popularity?

It is a data platform on a website that enables people to exchange information about themselves on the internet. Users are able to create their individual profile and to communicate with friends or new people. It's popular because it helps people meet others with similar interests and similar tastes. It creates virtual communities among people who want to connect with each other, but might never meet without the mediation of the networking site.

2. Why was Orkut so successful in Brazil? What caused problems later?

Google was already well known and had very good reputation in Brazil. Besides, it served a Brazilian market gap with its social networking site, which attracted the extremely community-oriented Brazilians. Orkut was also popular because it was brilliantly marketed. Managers used known cultural attractions like the name of a popular yoghurt drink, the colors of the Brazilian Football World Cup team, and such to make the site attractive.
Orkut had problems with their internet security. The site was abused by some users who turned it into a meeting place for illegal activities, such as child pornography and drug dealing. The company did not control such users and did not even react when other users complained. Google even resisted requests from Brazilian legal authorities to share information, when the courts were investigating users committing serious crimes.
Orkut was not able to negotiate with the Brazilian law in an appropriate way. The company failed to understand that Brazilian law does not protect internet privacy as strictly as U.S. law does, and that they would even lose users and advertising sponsors as a consequence. Both the government and some users did not understand why Orkut refused to cooperate. As Hohagen, Google's general director in Brazil, admitted, the company was not prepared for the...