Prior research has focused on the benefits of usage of social media such as Facebook in terms of the social capital gains they bring. Other research has studied the adverse impact of such usage on academic performance. In this study we try to understand both the beneficial and adverse aspects of Facebook usage in the case of U.S. undergraduate students. Basing on social capital theory and system usage in hedonic context, we tested the dual effect of the usage of Facebook on social capital and academic performance of the students. Preliminary results show that a rich use of Facebook enhances the academic performance and extensive presence on Facebook develops the student's social capital in terms of number and quality of connections, relationships and interactions. Implications of the early research findings and directions for future research are drawn.