Joomla is an excellent content management system for making powerful community websites, but I am surprised that there are very few community portals that has been developed by using joomla and its modules. Recently I was involved in the development of a community portal themithila.com. There I saw the power of joomla not only as a content management system but also as a community management system.
The real power of joomla lies in its extensions which are called modules/component also. If you are making a community site with joomla then the most important component will be community builder.
Community Builder suite extends the Joomla! user management system. Its Key features are addition of extra fields in profile, enhanced registration workflows, user lists, connection paths between users, admin defined tabs and user profiles, image upload, front-end workflow management, integration with other components, like PMS, Newsletter, Forum, Galleries
It is available free for download on joomlapolis.com In addition to this there are 51 plugins available on joomla official website which can convert your community portal comparable to any world class social networking website.