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Facebook 

Facebook, Inc.
Type Private
Founded Cambridge, Massachusetts
(February 4, 2004)[1]
Headquarters Palo Alto, California
Key people Mark Zuckerberg, Founder and CEO
Dustin Moskovitz, Co-founder
Sheryl Sandberg, COO
Matt Cohler, VP of Product Management
Chris Hughes, Co-founder
Revenue ▲ US$150 million (est.)[2]
Employees 500 (March 2008)[3]
Website facebook.com
Type of site Social networking
Advertising Banner ads
Registration Required
Available in Bokmål, English, French, German, Italian, Japanese, Polish, Spanish
Launched February 2004
Current status Active

Facebook is a social networking website launched on February 4, 2004. The website is privately owned and operated by Facebook, Inc. The free-access website allows users to join networks organized by city, workplace, school, and region to connect and interact with other people. Users can add friends and send them messages, and update their personal profile to notify friends about themselves. The website's name 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 Harvard students, but was expanded to other colleges in the Ivy League. It later expanded further to include any university student, then high school students, and, finally, to anyone aged 13 and over. Peter Thiel was the first person to fund the company, with an initial investment of US$500,000. Features of the website include a Wall for posting messages, Pokes for sending virtual "pokes", and Photos for uploading digital photos. The website has more than 69 million active users worldwide.[4]

Due to the website's popularity, Facebook has met with some controversy related to its founders' political views and censorship issues. It has been blocked in several countries including Syria and Iran, because of the open nature of the website. Privacy has also been an issue of the website, and it has been compromised several times by separate parties.

Contents

History

Mark Zuckerberg founded "The Facebook", originally located at thefacebook.com, in February 2004 while attending Harvard University.[1] The company dropped The from its name after purchasing the domain name facebook.com in 2005.[5] Membership was initially restricted to students of Harvard College, but by the end of the first month, more than half of the undergraduate population at Harvard were registered on the service.[6] Dustin Moskovitz and Chris Hughes soon joined Zuckerberg to help promote the website. Facebook later expanded to Stanford, Columbia, and Yale.[7] This expansion continued in April when it expanded to the Massachusetts Institute of Technology (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 to Palo Alto, California with Andrew McCollum, who had a summer internship at Electronic Arts.[7]

Zuckerberg launched the high school iteration of Facebook on September 2, 2005, calling it "the next logical step".[8] Initially, high school networks required an invitation to join.[9] Within 15 days, a Facebook account was the only requirement to join high school networks.[9] By the end of the year, more than 2,000 colleges and over 25,000 high schools throughout seven countries including the United States, Canada, and the United Kingdom had networks on Facebook.[10][11] Facebook had expanded membership eligibility to employees of 10 preselected companies by April 26, 2006, including Amazon.com, Apple Inc., and Microsoft.[12] Facebook finally became open to everyone on September 11, 2006, with the only requirements being a valid email address and a minimum age of 13.[13][14]

Funding

Facebook received its first investment of US$500,000 in June 2004 from PayPal co-founder Peter Thiel in an angel round.[15] This was followed a year later by $12.8 million in venture capital from Accel Partners, and then $25 million more from Greylock Partners and Meritech Capital Partners.[15][16] It was discovered that during the 2005 fiscal year, Facebook had a net loss of $3.63 million.[17] Microsoft approached Facebook in September 2007, proposing an investment in return for a 5% stake in the company. Microsoft would pay an estimated $300–500 million for the share.[18] Microsoft announced on October 24, 2007 it had bought a 1.6% share of Facebook for $246 million.[19][20][21][22] On November 30, 2007, Hong Kong billionaire Li Ka-shing invested $60 million in Facebook.[23]

BusinessWeek reported on March 28, 2006 that a potential acquisition of the website was under negotiation. Facebook reportedly declined an offer of $750 million, and it was rumored the asking price rose as high as $2 billion.[24] With the sale of social networking website MySpace to News Corp, rumors surfaced about the possible sale of Facebook to a larger media company.[25] Zuckerberg had already said he did not want to sell the company and denied rumors to the contrary.[26] 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.[27] Thiel, by then a board member of Facebook, indicated Facebook's internal valuation was around $8 billion based on their projected revenues of $1 billion by 2015, comparable to Viacom's MTV brand and based on shared target demographic audience.[28] Other companies, including Google, expressed interest in buying a portion of Facebook, but an outright sale of Facebook was unlikely according to Zuckerberg, as he wanted to keep it independent.[29] Zuckerberg said, "We're not really looking to sell the company. [...] We're not looking to IPO anytime soon. It's just not the core focus of the company."[10]

Website

On the website's homepage, a login form is shown on the left, and a registration form is shown on the right for unregistered people.
On the website's homepage, a login form is shown on the left, and a registration form is shown on the right for unregistered people.

Facebook users can choose to join one or more networks on the website, organized by city, workplace, school, and region.[30] These networks help users connect with members of the same network. Users can also connect to friends, giving them access to their friends' profiles.[31]

The website is free to users, but generates revenue from advertising, including banner ads.[32] Users create profiles that often contain photos and lists of personal interests, exchange private or public messages, and join groups of friends.[33] The viewing of detailed profile data is restricted to users from the same network or confirmed friends.

Microsoft is Facebook's exclusive partner for serving banner advertising,[34] and as such 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 with other web companies, Facebook collects as much data from its visitors as Google and Microsoft, but considerably less than Yahoo!.[35] The data collected is used to show more relevant advertisements to website visitors.

Features

Main article: Facebook features

The media often compares Facebook to MySpace, but one significant difference between the two websites is the level of customization.[36] MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook only allows plain text.[37] The lack of decoration has been said to make the site more appealing to job seekers. Users can network, and even announce to their friends that they are seeking employment. In April 2007, CareerBuilder introduced a Facebook application that allows job recruiters to search through profiles.[38]

Several features from the original Facebook website still exist. They include the Wall, a space on every user's profile page that allows friends to post messages for the user to see,[39] Pokes, which allows users to send a virtual "poke" to each other (a notification that tells a user that they have been poked),[40] Photos, where users can upload albums and photos,[41] and Status, which allows users to inform their friends of their whereabouts and actions.[42] A user's Wall is visible to anyone who is able to see that user's profile, which depends on their privacy settings. In July 2007, Facebook began allowing users to post attachments to the Wall, whereas the Wall was previously limited to textual content only.[39]

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.[43] Initially, the News Feed caused dissatisfaction among Facebook users; some complained it was too cluttered and full of undesired information, while others were concerned it made it too easy for other people to track down individual activities (such as changes in relationship status, events, and conversations with other users).[44] In response to this dissatisfaction, Zuckerberg issued an apology for the site's failure to include appropriate customizable privacy features.[45] Since then, users have been able to control what types of information are shared automatically with friends.[45] Users are now able to prevent friends from seeing updates about different types of activities, including profile changes, Wall posts, and newly added friends.[45]

One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[41] Facebook allows users to upload an unlimited number of photos, compared with other image hosting services such as Photobucket and Flickr, which apply limits to the number of photos that a user is allowed to upload. However, users are limited to 60 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 can see the album, while the privacy of another album can be set so that all Facebook users can see it. Another feature of the Photos applications is the ability to "tag", or label users in a photo. For instance, if a photo contains a user's friend, then the user can tag the friend in the photo. This sends a notification to the friend that they have been tagged, and provides them a link to see the photo.[46]

Facebook Notes was introduced on August 22, 2006, 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.[13] During the week of April 7, 2008, Facebook began releasing a Chat feature to a limited number of networks.[47] This component is not an application; it is integrated directly into the user's browser as the user browses the Facebook website.[48] The feature allows users to chat with their friends, much in the way instant messaging works.

Facebook launched Gifts on February 8, 2007, which allowed users to send virtual gifts to their friends that appeared on the recipient's profile. Gifts cost $1.00 each to purchase, and a personalized message can be attached to each gift.[49][50] On May 14, 2007, Facebook launched the Marketplace application, allowing users to post free classified ads on the website.[51] The Marketplace has been compared to Craigslist by CNET, which points out that the major difference between the two online services is that listings posted by a user on Facebook Marketplace are only seen by users that are in the same network as that user, whereas listings posted on Craigslist can be seen by anyone online.[52]

Platform

Facebook launched the Facebook Platform on May 24, 2007, providing a framework for software developers to create applications that interact with core Facebook features.[53][54][54] A markup language was also introduced, called Facebook markup language, used to customize the "look and feel" of applications that developers created. This enabled Facebook itself to launch several new applications that integrated with the Facebook system.[53][54] These include the Gifts application, which allows users to send virtual gifts to each other, the Marketplace, allowing users to post free classified ads, 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.[55][56]

Applications that have been created include chess and a game similar to Scrabble, which allow users to play games against their friends.[57][58] The games played are asynchronous, which saves a user's move on the server, allowing the next move to be made any time in the future rather than immediately after the previous move.[59] Within a few months of launching the Facebook Platform, issues arose regarding "application spam", which involves Facebook applications "spamming" users to request it be installed.[60] Application spam has been considered one of the possible causes to the drop in visitors to Facebook starting from the beginning of 2008, when the website's growth had fallen from December 2007 to January 2008, its first drop since the website launched.[61]

Controversy

See also: Criticism of Facebook and Use of social network websites in investigations

Due to the website's popularity, Facebook has been involved in several controversial events. In October 2005, the University of New Mexico blocked access to Facebook from its campus computers and networks.[62] It cited a violation of the university's Acceptable Use Policy for abusing computer resources as the reason, stating the website forces use of the university's credentials for non-university business. They later unblocked Facebook after the website rectified the situation by displaying a notice on the login page stating the credentials used on the website are separate from the ones used for their school accounts.[63] The Ontario government also blocked access to Facebook for its employees in May 2007, stating the website was "not directly related to the workplace".[64]

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.[65] While police and Facebook staff attempted to comply with the privacy regulations by deleting such posts, they noted it was difficult to effectively police the individual users who repeatedly republished the deleted information.[66]

Due to the open nature of Facebook, several countries have banned access to it including Syria and Iran.[67][68] The Syrian government cited the ban was on the premise that the website promoted attacks on the authorities.[67][69] The Syrian government also feared Israeli infiltration of Syrian social networks on the website.[67] Facebook was used as a tool to criticize the Syrian government by its citizens, and public criticism of the Syrian government is punishable by imprisonment.[67] In Iran, Facebook was banned because of fears of opposition movements organizing using the website.[68]

Beacon

Main article: Facebook Beacon

Facebook announced Facebook Beacon on November 7, 2007, a marketing initiative that includes a system for websites to allow users to share chosen information about their activities on these websites with their Facebook friends.[70] With respect to privacy, Facebook states "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."[71] After Facebook was criticized for collecting more information on users for advertisers than was previously stated, Zuckerberg publicly apologized for the way 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."[72][73]

ConnectU

Divya Narendra, Cameron Winklevoss, and Tyler Winklevoss, the owners of the social networking website HarvardConnection, changed its name to ConnectU in September 2004 and filed a lawsuit against Facebook, alleging Zuckerberg had illegally used source code intended for the website they asked him to build for them.[74][75] Facebook later requested the court case that ConnectU filed against Facebook be dismissed, citing ConnectU's "broad brush allegations are unsupported by evidence". The case was dismissed by a Boston district judge.[76] ConnectU then filed another lawsuit against Facebook on March 11, 2008, continuing the case.[77]

Privacy

There are unresolved concerns regarding the use of Facebook as a means of surveillance and data mining.[78] Two MIT students were able to download over 70,000 Facebook profiles from four schools (MIT, New York University, the University of Oklahoma, and Harvard University) using an automated script, as part of a research project on Facebook privacy published on December 14, 2005.[79] The possibility of data mining remains open, as evidenced in May 2008, when the BBC technology programme "Click" demonstrated that personal details of Facebook users and their friends could be stolen by submitting malicious applications.[80]

Privacy proponents have criticized the site's privacy agreement, which 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, Facebook Platform developers and other users of Facebook, to supplement your profile."[81] Another clause that received criticism concerned 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 been addressed by Facebook spokesman Chris Hughes who said: "Simply put, we have never provided our users' information to third party companies, nor do we intend to."[82]

Concerns have also been raised regarding the difficulty of deleting user accounts from the website. Previously, Facebook only allowed users to "deactivate" their accounts so that their profile was no longer visible on the website. However, any information the user had entered into the website and on their profile remained publicly accessible on the website's servers. This outraged many users who wished to remove their accounts permanently, citing reasons such as the inability to erase "embarrassing or overly-personal online profiles from their student days as they entered the job market, for fear employers would locate the profiles".[83] Facebook changed its account deletion policies on February 29, 2008, allowing users to contact Facebook to request that their accounts be permanently deleted from the website.[84]

Reception

Facebook has more than 69 million active users worldwide.[4] According to Alexa, the website's ranking among all websites increased from 60th to 7th in terms of traffic, from September 2006 to September 2007.[85] Quantcast ranks the website 16th in terms of traffic,[86] and Compete.com ranks it 20th.[87] The website is the most popular for uploading photos, with 14 million uploaded daily.[4] On November 3, 2007, it was reported that there were seven thousand applications on Facebook, with another hundred created everyday.[88]

Facebook is the most popular social networking site in several English-speaking countries, including Canada[89] and the United Kingdom.[90] The website has won numerous awards and accolades, including being considered one of the "Top 100 Classic Websites" by PC Magazine in 2007,[91] and winning the "People's Voice Award" from the Webby Awards in 2008.[92] 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 the second most popular thing among undergraduates, tied with beer and sex and only ranked lower than the iPod.[93]

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