Facebook’s Startup Story
Facebook (www.facebook.com) was launched in February 2004 as a social network by Mark Zuckerberg and his Harvard classmates. Within five years it surpassed MySpace as the leading social network website. At first, the site was called “The Facebook” and was created for Harvard students to communicate with each other. It was then expanded to other Ivy League universities. The response was strong, so the site expanded membership to more mainstream schools and colleges. From there Zuckerberg opened up the floodgates to the public and the site’s user base grew exponentially.
Zuckerberg’s first attempt at a social network for friends was called Facemash, in which wrote the code in October 2003. At the time Facemash was mainly a photo contest that allowed Harvard users to vote on who had the hotter photo in face-to-face competitions. Zuckerberg acquired these photos by hacking Harvard’s network. He was warned but not punished as Facemash was shut down by the university within a few days. It led to an article in the student newspaper The Crimson that inspired Zuckerberg to create a new site in January 2004 called The Facebook. He launched the site a month later.
About a week after the launch Zuckerberg was accused by three Harvard students of using their ideas that were supposed to be for a social network site called Harvard Connection. These three seniors went on to sue and settle with Zuckerberg after Facebook became widely popular. The concept of the social network already existed with Friendster, another one of Zuckerberg’s influences.
Within a year the site changed its name to Facebook after a suggestion from Sean Parker, who became President of Facebook in 2004. Parker had gained national attention five years earlier as a co-founder of Napster, which changed the course of the music business, allowing people to download music for free. Although the service was shut down for violating copyright laws, Parker had become wealthy and had developed a reputation as a game changer.
By June of 2004 Facebook operations moved to the West Coast in Palo Alto. Parker persuaded Peter Thiel, the co-founder of PayPal, to make a big investment in the company, which was set up that year as a private corporation. In September 2005 Facebook introduced its high school platform to complement its established service for Harvard, Yale, Stanford, Columbia, MIT, and other prestigious universities. Then Facebook expanded its service to tech companies like Microsoft and Apple.
The service allowed users to share information within a network of selected members. It worked so well as both an education and business tool that Zuckerberg decided to open up the service to anyone with a valid email thirteen years old or older, starting in September 2006. That same month Facebook debuted its News Feed, which was a conglomeration of information about people in each user’s network. It included birthdays and upcoming events. Each user now had access to the News Feed page as well as their own profile page or profile pages of friends. In February 2009 Facebook introduced the “like” feature, which became a popular way for people to quickly communicate their preferences about articles, comments, and images.
Growth
Beginning in July 2007 Facebook made it possible for users to post attachments to text, such as notes, photos, and videos. In October 2007 Microsoft announced it was investing nearly a quarter billion dollars in Facebook, which allowed them to place ads on the site. Facebook reported that it generated positive cash flow for the first time in September 2009.
Facebook’s user base hit 100 million in August 2008. By the following April, the user base had doubled. It doubled again to 400 million by February 2010 and then 800 million in September 2011. Throughout 2012 the site claimed over 900 million users. In 2011 Facebook became the most visited website on the planet.
As Facebook grew in popularity it also grew in a controversy involving user privacy. In many ways, a person’s identity became closely linked with the information the person uploaded on Facebook, to the point that it was possible to lose friends or even a job over a flippant remark posted on Facebook. Law enforcement also began to use Facebook for tracking down criminals. Although Facebook lets users select who can view their posts, questions remain about whether the information is public or private and how it can be used. Facebook has answered this controversy by giving users more control over their privacy settings.
After months of hype by financial experts, Facebook became a publicly traded company in May 2012. Even though the financial analysts had touted it as the biggest IPO of all time, the stock’s first few months marked a huge disappointment. The IPO price of $38 per share was much higher than initial reports the price would be closer to $25. After the first-day shares plunged below the IPO price. By August the price had fallen in half. But the price was stabilized after Zuckerberg acknowledged the company’s missteps and made it clear he was confident about the company’s future.
10 Interesting Facts About Facebook
1. It was created in a college dorm: Mark Zuckerberg started building the prototype for what would become Facebook in his Harvard dorm room when he was only 18.
2. More than a billion people log in each day: Facebook’s daily active user count rose to 1.82 billion in the second quarter of 2020.
3. It is the world’s most popular app: Facebook’s mobile app was the most widely downloaded app in 2020, with a total of 3.14 billion downloads.
4. It is the second–largest search engine: In addition to being a social network, Facebook is now the second–largest search engine in the world after Google.
5. Its algorithm knows more than you think: The algorithms that power Facebook are so complex and sophisticated that most people don’t even realize how much they know about us.
6. It has an internal court system: Facebook has an internal court system made up of company employees and external experts known as the Facebook Oversight Board that can review and overturn company decisions regarding content moderation.
7. It’s worth over $600 billion: Facebook’s market capitalization is currently at an astonishing $639 billion (2021), making it the fifth–largest company in the world by market cap.
8. It owns over 70 other companies: Over the past 13 years, Facebook has acquired more than 70 other companies and services, ranging from Instagram to Oculus VR.
9. It influences elections: Studies have shown that Facebook can influence the public’s opinions and views on political candidates, making it a powerful tool for campaigns.
10. It has a secret team of security experts: Facebook employs a team of hundreds of security specialists located all over the world to help keep the platform safe and secure.
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