Designing data centers for Web 2.0 social networking applications is a major challenge because of the large number of users, the large scale of the data centers, the distributed application base, and the cost sensitivity of a data center facility. Optimizing the data center for performance per dollar is far from trivial. In this paper, we present a case study characterizing and evaluating hardware/software design choices for a real-life Web 2.0 workload. We sample the Web 2.0 workload both in space and in time to obtain a reduced workload that can be replayed, driven by input data captured from a real data center. The reduced workload captures the important services (and their interactions) and allows for evaluating how hardware choices affect end-user experience (as measured by response times). We consider the Netlog workload, a popular and commercially deployed social networking site with a large user base, and we explore hardware trade-offs in terms of core count, clock frequency, traditional hard disks versus solid-state disks, etc., for the different servers, and we obtain several interesting insights. Further, we present two use cases illustrating how our characterization method can be used for guiding hardware purchasing decisions as well as software optimizations.