Hi, There are lots of open source for social networking site like Dolphin, elgg, social engine, Joomla, drupal etc. But I will prefer to make your own CMS using a template engine (Smarty) or frame work (CakePHP, CodeIgniter). reason is clear let suppose in future if you want to make any thing new in the mind then in your own CMS you will be free for customization while in open source CMS hopefully you got the same feature but not sure with 100% satisfaction. So if you can make your own with investing some little bit more money then why we prefer other open source.
social engine costs like $700 bucks doesn't it? also, from what i understand you can't transfer their license if you end up selling your site... I personally feel that shelling out a few hundred bucks might be worth it--if--and this is critical--if the script you might buy already has a good deal of the functionality you require.
SocialEngine is a bit expensive, but I think it's the best. I've been using SocialEngine for about a year and I love it - It's really easy to customize, easy to add features (plugins), and it looks really nice, more "web 2.0"-ish compared to the other ones. And they're are many communities dedicated to SE support, and the SE Devs seem to be very active with the script, as they seem to come out with a couple new features or upgrade ever month, so you know they're working on the script, and you're not going to buy into some half-done script that the Devs have abandoned. I haven't used Elgg, but it looks similar to SocialEngine but it's free, so if you're looking for a free one, I'd try Elgg. I personally don't recommend Dzoic Handshakes or Boonex Dolphin because I find them really hard to customize, extremely ugly (and not web2.0-ish enough), not as many features, and I'm not sure about the support. Good luck.