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Facebook, Inc.
File:Facebook Logo.svg
The Facebook homepage.
Type of businessPrivate
Type of site
social networking
Available inEnglish, French, German, Spanish
FoundedCambridge, Massachusetts
(February 4 2004)
HeadquartersPalo Alto, California
Key peopleMark Zuckerberg, Founder and CEO
Dustin Moskovitz, Co-founder and VP of Engineering
Sheryl Sandberg, COO
Matt Cohler, VP Strategy & Business Operations
Chris Hughes, Co-founder
RevenueIncrease $150 million (est.) [1]
Employees500 (March 2008) [2]
URLwww.facebook.com
Advertisingbanner ads
Registrationrequired
LaunchedFebruary 2004
Current statusactive

Facebook is a social networking website that was launched on February 4 2004. The free-access website allows users to join one or more networks, such as a school, place of employment, or geographic region to easily connect with other people in the same network. The name of the website refers to the paper facebooks depicting members of a campus community that some American colleges and preparatory schools give to incoming students, faculty, and staff as a way to get to know other people on campus.

Mark Zuckerberg founded Facebook while still a student at Harvard University. Website membership was initially limited to only Harvard students, but was later expanded to include any university student, then high school students, and finally to anyone aged 13 and over.

The website has more than 64 million active users worldwide.[3] From September 2006 to September 2007, the website's ranking among all websites, in terms of traffic, increased from 60th to 7th, according to Alexa.[4] It is also the most popular website for uploading photos, with 14 million uploaded daily.[3] Due to the website's popularity, Facebook has met with some criticism and controversy in its short lifespan because of privacy concerns, the political views of its founders, and censorship issues.

History

2004

Mark Zuckerberg founded "The Facebook" in February 2004 while attending Harvard University.[5] Initially, membership was restricted to students of Harvard College, but by the end of the first month, more than half of the undergraduate population at Harvard registered on the service.[6] At that time, Dustin Moskovitz and Chris Hughes joined Zuckerberg to help promote the website. Facebook soon expanded to Stanford, Columbia, and Yale.[7] This expansion continued in April 2004 when it expanded to MIT, Boston University, Boston College, Northeastern University and all Ivy League schools within two months.[7] At the end of the school year, Zuckerberg and Moskovitz moved out to Palo Alto, California with Andrew McCollum, who had a summer internship at Electronic Arts.[7]

In September, Divya Narendra, Cameron Winklevoss and Tyler Winklevoss, the owners of the social networking website HarvardConnection, changed its name to ConnectU and filed a lawsuit against Facebook, alleging that Zuckerberg had illegally used source code intended for the website they asked him to build for them.[8][9] In June, Facebook received approximately $500,000 from PayPal co-founder Peter Thiel in an angel round.[10]

File:Logo-left.jpg
The former banner of Facebook

2005

In May 2005, Facebook raised $12.8 million in venture capital from Accel Partners.[11] On August 23 2005, Facebook bought the domain name facebook.com from the Aboutface Corporation for $200,000 and dropped "the" from its name.[12] On September 2 2005, Zuckerberg launched the high school iteration of Facebook, calling it the next logical thing to do.[13] Though initially described as separate "communities" to which users needed to be invited to participate, within fifteen days most high school networks did not require a password to join (although registration with Facebook was still necessary.) By October, Facebook's expansion had continued to include most small universities and junior colleges in the United States, Canada, and the UK, also having expanded to twenty-one universities in the United Kingdom.[14] On December 11 2005, universities in Australia and New Zealand were added to the Facebook network, bringing its size to more than 2,000 colleges and over 25,000 high schools throughout the United States, Canada, Mexico, the United Kingdom, Australia, New Zealand, and Ireland.[15]

2006

Mark Zuckerberg

On March 28 2006, BusinessWeek reported that a potential acquisition of the website was under negotiation. Facebook reportedly declined an offer of $750 million, and it was rumored that the asking price rose as high as $2 billion.[16] In early April, Peter Thiel, Greylock Partners, and Meritech Capital Partners invested an additional $25 million in the website.[17] On April 26 2006, high school students and employees of ten companies were eligible to join.[18] In May, Facebook's network extended into India, at Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs). A promotion was arranged between Facebook and iTunes, in which members of the Apple Students group would receive a free 25-song sampler each week until September 30 from various music genres. The promotion's purpose was to familiarize and encourage the students about each service as fall classes approached.[19] On August 22 2006, Facebook introduced Facebook Notes, a blogging feature with tagging, embedded images, and other features; it then began allowing the importation of blogs from Xanga, LiveJournal, Blogger, and other blogging services. This newly added feature also included the common blog feature of allowing readers to comment on other users' entries.[20] On September 11 2006, Facebook became open to all users of the Internet, prompting protest from its existing user base.[21] Two weeks later, Facebook opened registration to anyone with a valid e-mail address.[22]

With the sale of social networking website MySpace to News Corp, rumors surfaced about the possible sale of Facebook to a larger media company.[23] Zuckerberg, the owner of Facebook, had already said that he did not want to sell the company and denied rumors to the contrary.[24] He had already rejected outright offers in the range of $975 million, and it was not clear who might be willing to pay a higher premium for the website. Steve Rosenbush, a technology business analyst, suspected Viacom might.[25]

After September 11 2006, anyone 13 or older became eligible for membership.[26][27] In late September, serious talks between Facebook and Yahoo! took place concerning acquisition of the social network, with prices reaching as high as $1 billion.[28] In October 2007, after Google purchased video-sharing website YouTube, rumors circulated that Google had offered $2.3 billion to outbid Yahoo!.[29] Peter Thiel, a board member of Facebook, indicated that Facebook's internal valuation is around $8 billion based on their projected revenues of $1 billion by 2015, comparable to that of Viacom's MTV brand and based on shared target demographic audience.[30]

2007

Facebook headquarters in Palo Alto, CA

On May 10 2007, Facebook announced a plan to add free classified advertisements to its website, making it a competitor with established online companies such as Craigslist.[31] This feature, known as Facebook Marketplace, went live on May 14 2007. On May 24 2007, Facebook launched the Facebook Platform, which provides a framework for developers to create applications that interact with core Facebook features.[32][33] A markup language was also introduced, called Facebook markup language, which was used primarily to customize the "look and feel" of applications that developers created. This enabled Facebook itself to launch several new applications that tightly integrated with the Facebook system.[32][33] These include the Gifts application, which allows users to send virtual "gifts" to each other,[34] the Marketplace, allowing users to post free classified ads,[35] Events, which gives users a method of informing their friends about upcoming events, and Video, an application that allows users to share homemade videos with one another.[36]

In July, Facebook announced its first acquisition, purchasing Parakey, Inc. from Blake Ross and Joe Hewitt.[37] Facebook hired YouTube's former CFO Gideon Yu on July 24 2007, who succeeded Michael Sheridan.[38] In September 2007, Microsoft approached Facebook, proposing an investment in return for a 5% stake in the company. Microsoft would pay an estimated $300–$500 million for the share.[39] On October 24 2007, Microsoft announced that it had bought a 1.6% share of Facebook for $246 million.[40][41][42][43] Other companies, including Google, had also expressed interest in buying a portion of Facebook,[44] but an outright sale of Facebook is unlikely according to founder Mark Zuckerberg, as he would like to keep it independent. "We're not really looking to sell the company," says Zuckerberg. "We're not looking to IPO anytime soon. It's just not the core focus of the company."[14]

On November 7 2007, Facebook announced Facebook Beacon, a marketing initiative which includes a system for websites to allow users to share chosen information about their activities on these websites with their Facebook friends.[45] With respect to privacy, Facebook states that "no personally identifiable information is shared with an advertiser in creating a Social Ad," and that "Facebook users will only see Social Ads to the extent their friends are sharing information with them".[46] Facebook Ads replaces the website's previous Facebook Flyers program.[47] On November 30 2007, the blog "All Things Digital" reported that Hong Kong billionaire Li Ka-shing had invested $60 million in Facebook.[48] On 5 December 2007, after Facebook was criticized for collecting more information on users for advertisers than was previously stated, Mark Zuckerberg publicly apologized for the way that Facebook launched the Beacon system, saying "The problem with our initial approach of making it an opt-out system instead of opt-in was that if someone forgot to decline to share something, Beacon still went ahead and shared it with their friends."[49][50]

2008

comScore released new traffic data for Facebook on February 22 2008, indicating that "the number of people who visit Facebook has been leveling off over the past few months in the U.S."[51] In March 2008, Sheryl Sandberg left Google to become Facebook's Chief operating officer, replacing Owen Van Natta.[52]

Website

File:Facebook homepage.png
Facebook homepage for users who are not logged in

Facebook users can choose to join one or more networks on the website, such as a school, place of employment, geographic region, or social group.[53] These networks help users to connect with other members of the same network. The website is free to users and generates revenue from advertising, such as banner ads.[54] Users create profiles that often contain photos and lists of personal interests, exchange private or public messages, and join groups of friends.[55] The viewing of detailed profile data is restricted to users from the same network or confirmed friends. In a 2006 study conducted by Student Monitor, a New Jersey-based limited liability company specializing in research concerning the college student market, Facebook was named as the second most popular thing among undergraduates, tied with beer and sex and only being ranked lower than the iPod.[56]

Microsoft is Facebook's exclusive partner for serving banner advertising.[57] This means that Facebook only serves advertisements that exist in Microsoft's advertisement inventory, which only contains advertisements that have been pre-approved by Microsoft and have an existing agreement established between Microsoft and the advertiser. When compared to other web companies, Facebook collects as much data from its visitors as Google and Microsoft, but considerably less than Yahoo!.[58] The data collected is useful to show more relevant advertisements to website visitors.

Features

Main article: Facebook features

When Facebook launched, it included several features that still exist today on the website. They include the Wall, which is a space on each user's profile page that allows friends to post messages for the user to see[59], Pokes, which allows users to send a virtual "poke" to each other,[60] Photos, where users can upload albums and photos,[61] and status, which allows users to inform their friends of their current whereabouts and actions.[62]

The Facebook Wall allows users to post messages on the profile of their friends.[63] A user's wall, dependent on privacy settings, is visible to anyone who is able to see that user's profile. In July 2007, Facebook began allowing users to post attachments to the wall, whereas the wall was previously limited to textual content only.[64]

Over time, Facebook has added several new features to its website. On September 6 2006, a News Feed was announced, which appears on every user's homepage and highlights information including profile changes, upcoming events, and birthdays, related to the user's friends.[65] Initially, the News Feed caused some dissatisfaction among Facebook users: some complained that the News Feed was too cluttered and was full of undesired information, while others were concerned that the News Feed made it too easy for other people to track down individual activities (like changes in relationship status, events, and conversations with other users).[66] In response to this dissatisfaction, Mark Zuckerberg, the founder of Facebook, issued an apology for the site's failure to include appropriate customizable privacy features.[67] Since then, users have been able to control what types of information are shared automatically with friends.[67] Users are now able to prevent friends from seeing updates about different types of activities, including profile changes, wall posts, and newly added friends.[67]

One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[68]

Controversy

Main article: Facebook controversy

Due to the website's popularity, it has been involved in some controversy since it was founded. In October 2005, the University of New Mexico blocked access to Facebook from its campus computers and networks.[69] It cited a violation of the university's Acceptable Use Policy for abusing computer resources as the reason, stating that the website forces use of the university's credentials for non-university business. They later unblocked Facebook after the website rectified the situation.[70] The Ontario government also blocked access to Facebook for its employees in May 2007, stating that the website is "not directly related to the workplace" so they were "restricting access to it".[71]

A notable ancillary effect of social networking websites like Facebook is the ability for participants to mourn publicly for a deceased individual. On January 1 2008, a memorial group on Facebook posted the identity of murdered Toronto teenager Stefanie Rengel, whose family had not yet given the Toronto Police Service their consent to release her name to the media.[72] While police and Facebook staff attempted to comply with the privacy regulations by deleting such posts, they noted that it was difficult to effectively police the individual users who repeatedly republished the deleted information.[73]

Facebook is often compared to MySpace by the media, such as the New York Times,[74] but one significant difference between the two websites is the level of customization. MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS) while Facebook only allows plain text.[75] However, a number of users have customized their profiles by using hacks. For example, on February 24 2006, users exploited a cross-site scripting vulnerability on a profile page and created a fast-spreading worm, which loaded a custom CSS file on infected profiles that made them look like MySpace profiles.[76]

Due to the open nature of Facebook, several countries have banned access to it, including Syria, Burma, Bhutan, the United Arab Emirates (UAE), and Iran.[77][78] The Syrian government cited that the ban was on the premise that the website promoted attacks on the authorities.[77][79][80] The Syrian government also feared Israeli infiltration of Syrian social networks on the website. Facebook was used as a tool to criticize the Syrian government by its citizens, and public criticism of the Syrian government is punishable by jail time.[77] In the UAE, Facebook was banned because the website was considered to assist in online dating, which was banned under the government's new internet policy.[78] In Iran, Facebook was banned because of fears of opposition movements organizing using the website.[80]

Privacy concerns

There have been concerns expressed regarding the use of Facebook as a means of surveillance and data mining.[81] Theories have been written about the possible misuse of Facebook, and privacy proponents have criticized the site's current privacy agreement.[82] The policy states "We may use information about you that we collect from other sources, including but not limited to newspapers and Internet sources such as blogs, instant messaging services and other users of Facebook, to supplement your profile." Facebook has assured users that the next privacy policy will not include the clause about information collection, and has denied that any data mining is being done "for the CIA or any other group."[83] However, the possibility of data mining by private individuals unaffiliated with Facebook remains open, as evidenced by the fact that two MIT students were able to download over 70,000 Facebook profiles from four schools (MIT, NYU, the University of Oklahoma, and Harvard) using an automated script, as part of a research project on Facebook privacy published on December 14 2005.[84] A second clause that received criticism regards Facebook's right to sell users' data to private companies, stating "We may share your information with third parties, including responsible companies with which we have a relationship." This concern has also been addressed by spokesman Chris Hughes who said "Simply put, we have never provided our users' information to third party companies, nor do we intend to."[85]

See also

References

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Further reading

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