Mark Zuckerberg wrote Facemash, the predecessor to Facebook, on October 28, 2003,
while attending Harvard as a sophomore. According to The Harvard Crimson, the site
was comparable to Hot or Not, and "used photos compiled from the online facebooks of
nine houses, placing two next to each other at a time and asking users to choose the
'hotter' person".[13][14]
Mark Zuckerberg co-created Facebook in his
Harvard dorm room.
To accomplish this, Zuckerberg hacked into the
protectedareas of Harvard's computer network and
copied the houses' private dormitory ID images.
Harvardat that time did not have a student
"facebook"(a directorywith photos and basic
information). Facemash attracted450
visitors and 22,000 photo-views in its
first four hours online.
The site was quickly forwarded to several
campusgrouplist-servers, but was shut
down a few dayslater by theHarvard
administration. Zuckerberg was charged
by theadministration with breach of
security, violating copyrights, and
violating individual privacy, and faced
expulsion.Ultimately, however, the
charges were dropped. Zuckerberg expanded on this initil
project that semester by creating a social study tool ahead
of an art history final, by uploading 500 Augustan images to a website, with one
image per page along witha comment section. He opened the site up to his
classmates, and people started sharingtheir notes.
The following semester, Zuckerberg began writing code for a new website in
January 2004. He was inspired, he said, by an editorial in The Harvard Crimson
about the Facemashincident. On February 4, 2004, Zuckerberg launched
"Thefacebook", originally locatedat thefacebook.com.
Six days after the site launched, three Harvard seniors, Cameron Winklevoss,
Tyler Winklevoss, and Divya Narendra, accused Zuckerberg of intentionally
misleading theminto believing he would help them build a social network
called HarvardConnection.com,while he was instead using their ideas to
build a competing product.The three complained to the Harvard Crimson,
and the newspaper began an investigation. The three later filed alawsuit
against Zuckerberg, subsequently settling.Membership was initially restricted
to students of Harvard College, and within the first monthmore than half the
undergraduate population at Harvard was registered on the service.
Eduardo Saverin (business aspects), Dustin Moskovitz (programmer),
Andrew McCollum (graphic artist), and Chris Hughes soon joined Zuckerberg
to help promote the website. In March 2004, Facebook expanded to
Stanford, Columbia, and Yale. It soon opened to the other Ivy League schools,
Boston University, New YorkUniversity, MIT, and graduallymost universities in
Canada and the United States.Facebook incorporated in the summer of 2004,
and the entrepreneur Sean Parker, whohad been informally advising Zuckerberg,
became the company's president. In June2004, Facebook moved its base
of operations to Palo Alto, California. It received itsfirst investment later
that month from PayPal co-founder Peter Thiel.The company
dropped The from its name after purchasing thedomain name facebook.com in 2005
for $200,000.
Facebook launched a high-school version in September 2005, which
Zuckerberg called the next logical step. At that time, high-school networks
required an invitation to join. Facebook later expanded
membership eligibility to employees of several companies, including
Apple Inc. and Microsoft. Facebook was then opened on
September 26, 2006, to everyone of age13 and older with
a valid email address.On October 24, 2007, Microsoft announced
that it had purchased a 1.6% share ofFacebook for $240 million,
giving Facebook a total implied value of around $15 billion.
Microsoft's purchase included rights to place international
ads on Facebook.
In October 2008, Facebook announced that it would set
up its international headquartersin Dublin, Ireland. In September 2009,
Facebook said that it had turned cash-flow
positive for the first time. In November 2010, based on SecondMarket Inc.,
an exchange for shares of privately held companies, Facebook's value
was $41 billion (slightlysurpassing eBay's) and it became the third
largest US web company after Google and Amazon. Facebook has
been identified as a possible candidate for anIPO by 2013.
Traffic to Facebook increased steadily after 2009. More people
visited Facebook thanGoogle for the week ending March 13, 2010.
In March 2011 it was reported that Facebook removes approximately
20,000 profiles from the site every day for various infractions,
including spam, inappropriate content and underage use,
as part of its efforts to boost cyber security.
In early 2011, Facebook announced plans to move to its new
headquarters, the former
Sun Microsystems campus in Menlo Park, California.
Company
Ownership
Mark Zuckerberg owns 24% of the
company, Accel Partners owns 10%,
Digital SkyTechnologies owns 10%,
Dustin Moskovitz owns 6%,
Eduardo Saverin owns 5%,
Sean Parker owns 4%, Peter Thiel
owns 3%, Greylock Partners and
Meritech Capital Partners own
between 1 to 2% each,
Microsoftowns 1.3%, Li Ka-shing
owns 0.75%,the Interpublic Group
owns less than 0.5%, a smallgroup
of current and former employeesand
celebrities own less than 1% each, including
Matt Cohler, Jeff Rothschild, Adam D'Angelo,
Chris Hughes, and Owen Van Natta, while
Reid Hoffman and Mark Pincus have sizable holdings of the company,
and the remaining 30% or so are owned by employees, an undisclosed number of
celebrities, and outsideinvestors.Adam D'Angelo, chief technology officer and
friend of Zuckerberg, resigned in May 2008. Reports claimed that he and
Zuckerberg began quarreling, and that he was nolonger interested in partial
ownership of the company.
Management
Key management personnel comprise Chris Cox (VP of Product), Sheryl
Sandberg (COO),and Donald E. Graham (Chairman). As of April 2011,
Facebook has over 2,000employees,and offices in 15 countries.
Revenue
Most of Facebook's revenue comes from advertising. Microsoft is
Facebook's exclusive partner for serving banner advertising, and
therefore Facebook serves only advertisementsthat exist in
Microsoft's advertisement inventory.Facebook generally has a
lower clickthrough rate (CTR) for advertisements than most major
websites. Banner advertisements on Facebook have generally
received one-fifth the number
of clicks compared to those on the Web as a whole.
This means that a smaller percentage of Facebook's users
click on advertisements than many other large websites.
For example,
while Google users click on the first advertisement for search
results an average of 8% of thetime (80,000 clicks for
every one million searches), Facebook's users click on
advertisements an average of 0.04% of the time (400
clicks for every one million pages).
Sarah Smith, who was Facebook's Online Sales Operations
Manager, confirmed that successful advertising campaigns
can have clickthrough rates as low as 0.05% to 0.04%,
and that CTR for ads tend to fall within two weeks.
Competing social network MySpace's CTR, in comparison,
is about 0.1%, 2.5 times better than Facebook's but
still low comparedto many other websites. Explanations
for Facebook's low CTR include the fact that Facebook's users
are more technologically savvy and therefore use ad blocking
software to hide advertisements, that users are younger and
therefore better at ignoring advertisingmessages, and that
MySpace users spend more time browsing throughcontent,
while Facebook users spend their time communicating with
friends and therefore have their attention diverted away from
advertisements.On pages for brands and products, however
, some companies have reported CTR as high as 6.49% for
Wall posts. Involver, a social marketing platform,announced
in July 2008 that it managed to attain a CTR of 0.7% on
Facebook (over 10 times the typical CTR for Facebook
ad campaigns) for its first client, Serena Software,managing
to convert 1.1 million views into 8,000 visitors to their website.
A study found that, for video advertisements on Facebook,
over 40% of users who viewedthe videos viewed the entirevideo,
while the industry average was 25% for in-banner video ads.
Mergers and acquisitions
On November 15, 2010, Facebook announced it had acquired FB.com
from the American Farm Bureau Federation for an undisclosed amount.
On January 11, 2011,the Farm Bureau disclosed $8.5 million in
"domain sales income", making the acquisitionof FB.com one of
the ten highest domain sales in history.Operations
A custom-built data center with substantially reduced ("38% less")
power consumption compared to existing Facebook data centers
opened in April 2011 in Prineville, Oregon.Website
Facebook's homepage features a login form on the top right
for existing users, and a
registration form directly
underneath for new visitors.
Users can create profiles with photos, lists of personal interests,
contact information, and other personal information. Users can
communicate with friends and other users through private or
public messages and a chat feature. They can also create
and join interest groupsand "like pages" (called "fan pages"
until April 19, 2010), some of which are maintained by
organizations as a means of advertising.
To allay concerns about privacy, Facebook enables users to
choose their own privacy settings and choose who can see
specific parts of their profile. The website is free to users,
and generates revenue from advertising, such as banner ads.
Facebook requires a user'sname and profile picture
(if applicable) to be accessible by everyone.
Users can control who sees other information they
have shared, as well as who can find them in searches, through
their privacy settings.
Profile shown on Facebook in 2011.
The media often compare Facebook to
MySpace, but one significant difference
between the two websites is the level of
customization. Another difference is
Facebook's requirement that users give
their true identity, a demand that
MySpacedoes not make. MySpace
allows users todecorate their
profiles using HTML and
Cascading Style Sheets (CSS),
while Facebook allows only
plain text.Facebookhas a number
of features with which usersmay interact. They include the Wall, a spac
on every user's profile page that allows friends to post messages for the user to
see; Pokes, which allows users to send a virtual "poke" to each other
(a notification then tells a user thatthey have been poked); Photos,
where users can upload albums and photos; and Status, which allows
users to inform their friends of their whereabouts and actions. Depending
on privacy settings, anyone who can see a user's profile can also view that
user's Wall. In July2007, Facebook began allowing users to post
attachments to the Wall, whereas the Wallwas previously limited to textual
content only.
On September 6, 2006, a News Feed was announced, which appears
on every user's homepage and highlights information including profile
changes, upcoming events, andbirthdays of the user's friends.
This enabled spammers and other users to manipulate these features
by creating illegitimate events or posting fake birthdays to attract
attention to their profile or cause. Initially, the News Feed caused
dissatisfaction among Facebook users; some complained it was
too cluttered and full of undesired information, others were
concerned that it made it too easy for others to track individual
activities (such as relationship status changes, events, and
conversations with other users).In response, Zuckerberg issued
an apology for the site's failure to include appropriate
customizable privacy features. Since then, users have been
able to control what types ofinformation are shared automatically
with friends. Users are now able to preventuser-set categories
of friends from seeing updates about certain types of activities,
including profile changes, Wall posts, and newly added friends.
On February 23, 2010, Facebook was granted a patent on certain
aspects of its NewsFeed.The patent covers News Feeds in which
links are provided so that one user canparticipatein the same
activity of another user. The patent may encourageFacebook to
pursue actionagainst websites that violate its patent, which may
potentially include websitessuch as Twitter.One of the most popular
applications on Facebook is the Photos application, where userscan
upload albums and photos. Facebook allows users to upload an
unlimitednumber of photos,compared with other image hosting services
such as Photobucket and Flickr, which apply limitsto the number of
photos that a user is allowed to upload. During the first years,
Facebook userswere limited to 60 photos per album.
As of May 2009, this limit has been increased to 200 photos per album.
Privacy settings can be set for individual albums,
limiting the groups of users that can see an
album.For example, the privacy of an album can be set so that only
the user's friends cansee the album,while the privacy of another
album can be set so that all Facebook users can see it.
Another feature of the Photos application is the ability to "tag,"
or label, users in aphoto. For instance, ifa photo contains a
user's friend, then the user can tag the friend in thephoto.
This sends a notification to the friend that they have beentagged,
and provides thema link to see the photo.
Profile shown on Thefacebook in 2005
Facebook profile shown in 2007
Facebook Notes was introduced on August 22, 2006, a
blogging feature that allowed tagsand embeddable images.
Users were later able to import blogs from Xanga, LiveJournal,
Blogger, and other blogging services. During the week of April 7,
2008, Facebook released a Comet-based instant messaging
application called "Chat" to several networks, which allow
s users to communicate with friends and is similar in functionality
to desktop-based instant messengers.
Facebook launched Gifts on February 8, 2007, which allows
users to send virtual gifts to theirfriends that appear on the
recipient's profile. Gifts cost $1.00 each to purchase, and a
personalized message can be attached to each gift.
On May 14, 2007, Facebook launched Marketplace,
which lets users post free classified ads. Marketplace has been
compared to Craigslist by CNET, which points out that the major
difference between the two is that listings
posted by a user on Marketplace are seen only by users in the same
network as that user, whereas listings posted on Craigslist can
be seen by anyone.On July 20, 2008, Facebook introduced
"Facebook Beta", a significant redesign of its userinterface
on selected networks. The Mini-Feed and Wall were consolidated,
profiles were separated into tabbed sections, and an effort was
made to create a "cleaner" look. Afterinitially giving users a
choice to switch, Facebook began migrating all usersto the
new version beginning in September 2008.
On December 11, 2008, it was announced tha
t Facebook was testing a simpler signup process.
Many newsmartphones offer access to Facebook services
through either their web-browsers or applications.
An official Facebook application is available for the
iPhone OS, the Android OS, and the WebOS.
Nokia and Research In Motion both provide
Facebook applications for their own mobile
devices. More than 150 million active users access
Facebook through mobile devicesacross 200 mobile
operators in 60 countries.
On November 15, 2010, Facebook announced a new
"Facebook Messages" service. In a media event that day,
CEO Mark Zuckerberg said, "It's true that people will be able
to have an @facebook.com email addresses, but it's not email."
The launch of such a
eature had been anticipated for some time before the announcement,
with some calling it a "Gmail killer." The system, to be available
to all of the website's users, combines text messaging,
instant messaging, emails, and regular messages, and will
include privacysettings similar to those of other Facebook services.
Codenamed "Project Titan," Facebook Messages took 15 months
to develop.
In February 2011, Facebook began to use the
hCalendar microformat to mark up events,and the
hCard microformat for the events' venues, enabling
the extraction of details to users' own calendar or mapping
applications.Since April 2011 Facebook users have had the
ability to make live voice calls via Facebook Chat, allowing
users to chat with others from all over the world. This feature
, which is provided free through T-Mobile's new Bobsled service,
lets the user add voiceto the current Facebook Chat as well as
leave voice messages on Facebook.
Reception
According to comScore, Facebook is the leading social networking site based on monthly
unique visitors, having overtaken main competitor MySpace in April 2008. ComScore
reports that Facebook attracted 130 million unique visitors in May 2010, an increase of
8.6 million people. According to Alexa, the website's ranking among all websites
increased from 60th to 7th in worldwide traffic, from September 2006 to September
2007, and is currently 2nd. Quantcast ranks the website 2nd in the U.S. in traffic, and
Compete.com ranks it 2nd in the U.S. The website is the most popular for uploading
photos, with 50 billion uploaded cumulatively. In 2010, Sophos's "Security Threat Report
2010" polled over 500 firms, 60% of which responded that they believed that Facebook
was the social network that posed the biggest threat to security, well ahead of MySpace,
Twitter, and LinkedIn.
Facebook is the most popular social networking site in several English-speaking countries,
including Canada, the United Kingdom, and the United States. In regional Internet
markets, Facebook penetration is highest in North America (69 percent),
followed by Middle East-Africa(67 percent), Latin America (58 percent),
Europe (57 percent), and Asia-Pacific (17 percent).The website has won
awards such as placement into the "Top 100 Classic Websites" by
PC Magazine in 2007, and winning the "People's Voice Award" from the
Webby Awards in 2008. In a 2006 study conducted by Student Monitor,
a New Jersey-based company specializing in research concerning the
college student market, Facebook was named the second most popular
thing among undergraduates, tied with beer and only ranked lower
than the iPod.On March 2010, Judge Richard Seeborg issued an order
approving the class settlementin Lane v. Facebook, Inc.,
the class action lawsuit arising out of Facebook's Beacon program.
In 2010, Facebook won the Crunchie "Best Overall Startup Or Product"
for the third year in arow and was recognized as one of the
"Hottest Silicon Valley Companies" by Lead411.
However, in a July 2010 survey performed by the
American Customer Satisfaction Index, Facebook received a score
of 64 out of 100, placing it in the bottom 5% of all private-sector
companies in terms of customer satisfaction, alongside industries
such as the IRS e-file system, airlines, and cable companies.
The reasons why Facebook scored so poorly includeprivacy problems,
frequent changes to the website's interface, the results returned
by the News Feed,and spam.
In December 2008, the Supreme Court of the Australian
Capital Territory ruled that Facebookis a valid protocol to
serve court notices to defendants. It is believed to be the world's
first legaljudgement that defines a summons posted on
Facebook as legally binding. In March 2009,the New Zealand
High Court associate justice David Gendall allowedfor the serving
of legal papers on Craig Axe by the company Axe Market Garden
via Facebook. Employers (such as Virgin Atlantic Airways) have
also used Facebook as a means to keep tabs ontheir employees
and have even been known to fire them over posts they have made.
By 2005, the use of Facebook had already become so ubiquitous
that the generic verb"facebooking" had come into use to describe
the process of browsing others' profilesor updating one's own.
In 2008, Collins English Dictionary declared "Facebook" as its
new Word of the Year. In December 2009, the
New Oxford American Dictionary declared its word of the year
to be the verb "unfriend", defined as "To remove someone
as a 'friend'on a social networking site such as Facebook.
As in, 'I decided to unfriend my roommate on Facebook after
we had a fight.'"In April 2010, according to The New York Times,
countries with the most Facebook userswere the United States,
the United Kingdom and Indonesia. Indonesia has become the
country with the second largest number of Facebook users,
after the United States, with 24 milion users, or 10% of
Indonesia's population. Also in early 2010, Openbook was
established, an avowed parody (and privacy advocacy) website
that enables text-based searches of those Wall posts that are
available to "Everyone", i.e. to everyone on theInternet.
Writers for The Wall Street Journal found in 2010 that
Facebook apps were transmittingidentifying information to
"dozens of advertising and Internet tracking companies".
The appsused an HTTP referrer which exposed the user's
identity and sometimes their friends'. Facebook said,
"We have taken immediate action to disable all applications
that violate our terms".
Privacy
According to comScore, an internet marketing research company,
Facebook collects as muchdata from its visitors as Google and
Microsoft, but considerably less than Yahoo!. In 2010, the security
team began expanding its efforts to reduce the risks to users' privacy.
On November 6, 2007, Facebook launched Facebook Beacon, which
was an ultimately failed attempt toadvertise to friends of users using the
knowledge of what purchases friendsmade.Criticism
Facebook has met with controversies. It has been blocked intermittently
in several countriesincluding the People's Republic of China, Vietnam,
Iran, Uzbekistan, Pakistan,Syria, and Bangladesh on different bases.
For example, it was banned in many countries of the world on the basis
of allowed content judged as anti-Islamic and containing religious
discrimination.It has also been banned at many workplaces to prevent
employees wasting their time on the site.The privacy of Facebook users
has also been an issue, and the safety ofuser accounts has been
compromised several times. Facebook has settled a lawsuit regarding
claims over source code and intellectual property. In May 2011 emails
were sent to journalists andbloggersmaking critical allegations about
Google's privacy policies; however it waslater discoveredthat the
anti-Google campaign, conducted by PR giant Burson-Marsteller, was
paid for by Facebook in what CNN referred to as "a new level skullduggery"
and which Daily Beast called a "clumsy smear."Media impact
In April 2011, Facebook launched a new portal for marketers and
creative agencies tohelp them develop brand promotions on Facebook.
The company began its push by inviting a select group of British
advertising leaders to meet Facebook's top executives at an
"influencers' summit" in February 2010. Facebook has now been
involved in campaigns for True Blood, American Idol, and Top Gear.
Social impact
Facebook has affected the social life and activity of people
in various ways. It can reunitelost family members and friends.
One such reunion was between John Watson and the daughter
he had been searching for 20 years. They met after Watson found
her facebookprofile. Another father-daughter reunion was between
Tony Macnauton and FrancesSimpson who had not seen each other
for nearly 48 years.Some studies have named Facebook as a source of
problems in relationships. Several newsstories have suggested that using
Facebook causes divorce and infidelity,but the claims have been
questioned and refuted by other commentators.
Political impact
Facebook's role in the American political
process was demonstrated in January 2008,
shortly before the New Hampshire primary,
when Facebook teamed up with ABC and
Saint Anselm College to allow users to give
live feedback about the "back to back" January5
Republican and Democratic debates.
Charles Gibsonmoderated both debates, held at
the Dana Center for the Humanities at
Saint Anselm College. Facebook users took
part in debate groupsorganized around specific
topics, register to vote,
and message questions.
Over 1,000,000 people installed the Facebook application 'US politics' in order to take part,
and the application measured users' responses to specific comments made by the debating
candidates. This debate showed the broader community what many young students had
already experienced: Facebook was an extremely popular and powerful new way to interact
and voice opinions. An article by Michelle Sullivan of Uwire.com illustrates how the
"facebook effect" has affected youth voting rates, support by youth of political candidates,
and general involvement by the youth population in the 2008 election.
In February 2008, a Facebook group called "One Million Voices Against FARC" organized
an event in which hundreds of thousands of Colombians marched in protest against the
Revolutionary Armed Forces of Colombia, better known as the FARC (from the group's
Spanish name). In August 2010, one ofNorth Korea's official government websites and
the official news agency of the country, Uriminzokkiri, joined Facebook.
In 2010 an English director of public health, whose staff was researching Syphilis, linked
and attributed a rise in Syphilis cases in areas of Britain to Facebook. The reports of this
research were rebuked by Facebook as "ignoring the difference between correlation and
causation."
