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This paper introduces Personal Networks (PN), a new concept related to the emerging field of pervasive computing that extends the concept of a Personal Area Network (PAN). The latter refers to a space of small coverage (less than 10 m) around a person where ad-hoc communication occurs, typically between portable and mobile computing devices such as laptops, Personal Digital Assistants, cell phones, headsets and digital gadgets. We envision a PN to have a core consisting of a PAN, which is extended on-demand and in an ad-hoc fashion with personal resources or resources belonging to others. This extension will physically be made via infrastructure networks, e.g., the Internet, an organisation's intranet, or a PAN belonging to another person, a vehicle area network, or a home network. The PN is configured to support the application and takes into account context- and location information. The resources, which can become part of a PN, will be very diverse. These resources can be private or may have to be shared with other people. They may be free or one may have to pay for their usage. They can be physically close or far away. In this paper, we discuss a number of challenging research problems and potential directions for solutions. Specifically we address the architecture of PNs, techniques for resource and environment discovery, self-organisation, routing, co-operation with fixed infrastructures, and security and accounting.