When a good job opens up, it may never be publicly advertised before it's taken. That's often because an employee recommends a friend or former colleague to the hiring manager, who ends up acting on that recommendation.
That person may not be more qualified than you -- in fact, they may not be qualified at all. However, they know someone who knows someone, and that can go a long way. That may not seem fair, but companies can generally hire whomever they want as long as they're not being discriminatory. In the job market, your connections are often more important than your skills and experience.
Networking may not get you the job, but it could at least get you an interview, and it gives you a major advantage over someone who's blindly sending in a resume.
Source: Fool.com