1 No real connections
People weren't that loyal to Hi5 because the connections they had with people weren't that real. Compare that to Facebook, where it's really hard to leave for another social network because you can't leave your real network of friends (See why did Facebook succeed).
2 The 'Who viewed your profile' feature
No one wants to let people know that he stalks them. The 'who viewed your profile' feature was a horrible mistake that hi5 did. When Facebook came without that feature, it seemed like a savior (See why do people care about online privacy).
3 Privacy concerns
Hi5 is much more open than Facebook. Most people don't feel comfortable in a social network with no strict privacy policies. The privacy concerns were among the most important reasons that led to the failure of Hi5.com.
4 Facebook positioned itself as a network of real people
While hi5 was full of fake profiles, Facebook positioned itself as a network of real people. This gave the Facebook brand a strong edge in marketing and helped it attract many of the hi5 users.
5 So many people migrated to Facebook
Facebook literally killed hi5. With Facebook becoming the new hot thing, many people stopped using hi5 and switched to facebook.
6 The site turned to social gaming
As a result of the tough competition, Hi5 positioned itself as a site for social gaming. That move was like admitting that Facebook is the real social network for people out there (See why branding is so important).
7 Turned itself into a social network for meeting new people
Hi5 changed their slogan to the social network for meeting new people. This didn't just make Facebook seem like the only place to contact friends but it turned hi5 into a cheap-looking dating site.
8 No clear branding strategy
Hi5's staff didn't brand their network correctly. They changed their skin more than once and the result was confused users who ran for the competition with the clearer branding strategy, Facebook.