Elgg
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Elgg is a social networking framework. It provides the necessary functionality to allow you to run your own social networking site, whether publicly (like Facebook) or internally on a networked intranet (like Microsoft Sharepoint).
To run Elgg, you need to have your own web server and a certain amount of technical knowledge - or access to someone who does, like a system administrator. (There are more detailed requirements over here.)
There is also a demo site running a standard installation of Elgg.
Elgg comes with advanced user management and administration, social networking, cross-site tagging, powerful access control lists, internationalisation support, multiple view support (eg cell phones, iPhone), an advanced templating engine, a widget framework and more. A full list is available here Features.
If you need more functionality than what Elgg offers out-of-the-box there are a couple of options:
Elgg is an open source product. Not all open source products are free to download, but Elgg is. That means, in its simplest form, Elgg costs nothing at all. This does not mean it's public domain: Elgg is released under the GNU Public License v2, which means the source code is licensed to you. With any software, it's always a good idea to read the license.
In certain circumstances - for example, if you want to use Elgg in a business-critical capacity, if you don't have any technical expertise in-house, or if you want to obtain Elgg training - you may find that you wish to purchase support or other Elgg-related services. More information on this is available from Elgg.com.
Truth, justice and freedom!
No, in all seriousness, Elgg doesn't stand for anything. It's named after a town in Switzerland. However, if you prefer this answer, it also means "moose" in many languages.
Elgg is backed by a company called Curverider. As an open source product, it also has contributors from a variety of other places.