I have been trying to align myself with the science of "Online Social Network Analysis" as well. I strongly believe it should be part of OR, not only it deals with sophisticated algorithms but it is also related to many of IE topics, like Human Factors and Psychology
Here are some basic suggestions:
1- (Reputation Algorithms) Ask them to invent a new page rank algorithm for reputation of people in a social network like tweeter. The algorithm has to be robust (minorities cannot manipulate it) [and please let us know if they succeeded in solving it]
2- (Mutually Trusted Node) If I know somebody on LinkedIN what is the best way for me to send him my message?. I can obviously send him a message directly but he may not even answer, but I can ask somebody in our mutual network who knows me and him both and I may talk to that third person to send my message to that hotshot on LinkedIN. The question is how do you algorithmically find that node on your network?
3- (Numerical Techniques) How do you sample from a huge network, like a web-graph or members of tweeter, how do you inverse a large matrix that is generated from tweeter?
4- If they don't want to read about advanced algorithms you can give them a dataset and ask them to implement a simple recommendation algorithm (something like Daniel Lemire's SLOPE ONE)
We would definitely appreciate if you could please post their final project online