I think paying for eyeballs is a stupid strategy as well that undervalues the network of users dramatically.

Advertising is largely the art of throwing shit at a wall and seeing what sticks. Yeah, with a lot of tools and the information Facebook has about their users, we can perfect the art of how to make shit stick.

This is the classic failure of big media: treating your users like an audience (eyeballs). Facebook understands its users interactions, designs around them and is doing brilliantly at keeping them engaged, then they bring in people from the advertising world and treat them like an audience.

They should be monetizing the edges, not the nodes.

I think the question of if the users are loyal is still up in the air. Facebook hasn't been around long enough on this massive scale to prove if the users are loyal. I personally don't think it's user base is loyal. The younger, more tech-savy generation on FB will jump ship as soon as something better comes along like some were doing already to Instagram or Twitter. The older generation might not necessarily be loyal to FB either, they are just too scared to move, or don't have the ability.

Users are anything but loyal. Mobile users have a bit better loyalty than web users, but lets face it - it's a free service with very little strings attached, and all of the lock-in that Facebook has tried to create has just frustrated users.