Facebook has done wonders to get people creating and consuming content on the internet. However, Facebook has grown to the point where it has no competition and is no longer innovating in ways that benefit us. Facebook should split into Facebook the aggregator and Facebook the content hoster. You could talk about a third piece that is Facebook the content provider, which is for providing things like gifs, templates, memes, emoji, games, and other stuff like that. Because Facebook hasn't completely broken from open web standards those types of content providers already exist today.
Aggregators would be where you go to set up your friend list and see your feed. It could look and feel like Facebook does now. It would have an open standard protocol that content hosters would use if they wanted to be aggregated. This could still be an add driven business, but subscription, self hosted, and DIY solutions could exist too.
Content hosters could either charge a monthly hosting fee, or they could serve up their own adds. Self hosted and DIY solutions could also exist.
The big benefit to this would of course be the competition. Since it's an open standard anyone could be a content host, and anyone could be an aggregator.
To make extra sure there is competition, and this could come in a phase two after the initial splitting up of Facebook, there should be open standards for exporting and importing friends, follows, likes, etc. to and from aggregators, and open standards for importing and exporting content from the hosters.
Speaking of follows and likes, there could also be aggregator aggregators (AAs). People could opt in to publicly and anonymously share their likes and follows and the AAs would consume those and report on trends that cross aggregator boundaries. Anonymity could be much more protected this way while still giving us that interesting information about what is trending.
One tricky part of this is how do I as a content author only allow my friends to see certain posts of mine? It would have to be with encryption. My content provider could keep public keys of my friends and only my friends (well, their aggregators) would be able to decrypt my posts using my friends' private keys. I can see some challenges and holes in this, but it doesn't seem any worse overall than how Facebook protects privacy now. Open implementations and peer review could get us to better-than-Facebook privacy quickly.
Facebook would ideally recognize their stagnation and initiate this split themselves. We as their user base can and should help them understand the importance of this. Hopefully it doesn't have to come down to government enforcement of anti-trust laws, but that could be a useful tool to apply here as well.