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Facebook, Inc.
Type of businessPrivate
Type of site
Social networking
Available inEnglish, French, German, Spanish
FoundedCambridge, Massachusetts
(February 4 2004)[1]
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 US$150 million (est.)[2]
Employees500 (March 2008)[3]
URLwww.facebook.com
AdvertisingBanner ads
RegistrationRequired
LaunchedFebruary 2004
Current statusActive

Facebook is a social networking website that was launched on February 4 2004. The website is owned and operated by Facebook, Inc., the parent company of the website and a privately held company. 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 and interact with other people. Users can post messages for their friends to see, and update their personal profile to notify friends about themselves. 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 soon expanded to the entire Ivy League. Later it expanded further to include any university student, then high school students, and finally to anyone aged 13 and over.

The website has more than 69 million active users worldwide.[4] 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.[5] It is also the most popular website for uploading photos, with 14 million uploaded daily.[4] 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. Facebook is currently the top social networking site in many Commonwealth nations such as, Canada[6], United Kingdom[7], and Australia[8].

History

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

Mark Zuckerberg founded "The Facebook" in February 2004 while attending Harvard University.[1] The company dropped "The" from its name upon purchasing the domain name facebook.com in 2005.[9] 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 were registered on the service.[10] At that time, Dustin Moskovitz and Chris Hughes joined Zuckerberg to help promote the website. Facebook soon expanded to Stanford, Columbia, and Yale.[11] This expansion continued in April when it expanded to MIT, Boston University, Boston College, Northeastern University, and all Ivy League schools within two months.[11] 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.[11] Facebook's net loss for the 2005 fiscal year was US $3.63 million. [12]

Zuckerberg launched the high school iteration of Facebook on September 2 2005, calling it the next logical thing to do.[13] Initially, the high school networks required an invitation to join.[13] Within fifteen days, high school networks did not require a password; the only requirement was a Facebook account.[13] 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.[14][15] Facebook had expanded membership eligibility to employees of ten preselected companies by April 26 2006, including Amazon.com, Apple Inc., and Microsoft.[16] 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.[17][18][19]

Funding

Facebook headquarters in Palo Alto, CA

Facebook received its first investment of $500,000 in June 2004 from PayPal co-founder Peter Thiel in an angel round.[20] 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.[21][22] 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.[23] Microsoft announced on October 24 2007 that it had bought a 1.6% share of Facebook for $246 million.[24][25][26][27] The blog All Things Digital reported that Hong Kong billionaire Li Ka-shing invested $60 million in Facebook on November 30 2007.[28]

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 that the asking price rose as high as $2 billion.[29] With the sale of social networking website MySpace to News Corp, rumors surfaced about the possible sale of Facebook to a larger media company.[30] Zuckerberg, the owner of Facebook, had already said that he did not want to sell the company and denied rumors to the contrary.[31] 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.[32] After Google purchased video-sharing website YouTube, rumors circulated that Google had offered $2.3 billion to outbid Yahoo!.[33] 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.[34] Other companies, including Google, had also expressed interest in buying a portion of Facebook, but an outright sale of Facebook is unlikely according to founder Mark Zuckerberg, as he would like to keep it independent.[35] "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]

Website

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.[36] These networks help users to connect with other members of the same network. Users can also add friends to their profile, which allows them to see the profiles of their friends.[37]

The website is free to users and generates revenue from advertising, such as banner ads.[38] Users create profiles that often contain photos and lists of personal interests, exchange private or public messages, and join groups of friends.[39] 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.[40]

Microsoft is Facebook's exclusive partner for serving banner advertising.[41] 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!.[42] 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[43], Pokes, which allows users to send a virtual "poke" to each other,[44] Photos, where users can upload albums and photos,[45] and status, which allows users to inform their friends of their current whereabouts and actions.[46]

The Facebook Wall allows users to post messages on the profile of their friends.[47] 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.[48]

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.[49] 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).[50] 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.[51] Since then, users have been able to control what types of information are shared automatically with friends.[51] Users are now able to prevent friends from seeing updates about different types of activities, including profile changes, wall posts, and newly added friends.[51]

One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[52] Facebook allows users to upload an unlimited number of photos, compared to 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 uploading up to 60 photos per album. Privacy settings can be set for each individual album, 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" 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.[53]

Facebook introduced Facebook Notes 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.[54]

Facebook launched Gifts on February 8 2007, which allowed users to send virtual gifts to their friends and appeared on the recipient's profile. The gifts cost US$1.00 each to purchase, and a personalized message can be attached to each gift.[55][56] On May 14 2007, Facebook launched the Marketplace application, allowing users to post free classified ads on the website.[57] 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.[58]

Facebook announced on May 10 2007 a plan to add free classified advertisements to its website, making it a competitor with established online companies such as Craigslist.[59] This feature, known as Facebook Marketplace, went live a few days later.

During the week of April 7, 2008, Facebook began releasing a Chat feature to a limited amount its networks.[60] This new component of the website is not an application, but instead is integrated directly into the user's browser as the user browses the Facebook website.[61] The feature allows users to Instant Message their friends, much in the way Google Talk or AOL Instant Messanger works.

Platform

Main article: Facebook 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.[62][63][63] 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.[62][63] 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.[64][65][66]

Applications that have been created include chess and Scrabble, which allow users to play games against their friends.[67][68] The games played are asynchronous, meaning that when a user makes a move in a game, it is saved on the server, allowing the next move to be made at any time in the future rather than immediately after the previous move.[69] Within a few months of launching the Facebook Platform, issues arose regarding "application spam", which involves Facebook applications "spamming" users to request that the application be installed.[70] 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 first launched.[71]

Controversy

Main article: Criticism of Facebook

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.[72] 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.[73] 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".[74]

File:Facebook group for Stefanie Rengel.png
The Facebook group dedicated to Stefanie Rengel

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.[75] 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.[76]

Facebook is often compared to MySpace by the media, such as The New York Times, but one significant difference between the two websites is the level of customization.[77] MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS) while Facebook only allows plain text.[78] 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.[79]

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.[80][81] The Syrian government cited that the ban was on the premise that the website promoted attacks on the authorities.[80][82][83] 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 imprisonment.[80] 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.[81] In Iran, Facebook was banned because of fears of opposition movements organizing using the website.[83]

Beacon

Main article: Facebook Beacon

Facebook announced Facebook Beacon on November 7 2007, 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.[84] 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".[85] 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."[86][87][88]

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 that Zuckerberg had illegally used source code intended for the website they asked him to build for them.[89][90] Facebook later requested that the court case that ConnectU filed against Facebook be dismissed, citing that ConnectU's "broad brush allegations are unsupported by evidence." The case was dismissed by a Boston district judge.[91] ConnectU then filed another lawsuit against Facebook on March 11 2008, continuing the case.[92]

Privacy

There have been concerns expressed regarding the use of Facebook as a means of surveillance and data mining.[93] Theories have been written about the possible misuse of Facebook, and privacy proponents have criticized the site's current privacy agreement.[94] 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."[95] 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.[96] 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."[97]

Concerns have been raised regarding the difficulty of deleting user accounts on the website. Previously, Facebook only allowed users to "deactivate" their accounts. This meant that their profile was no longer visible on the website, but any information that the user had entered into the website and on their profile still existed on the website's servers. This had concerned users who wished to permanently remove their account, citing reasons such as an overly embarrassing profile that may affect a future employer's decision in whether or not to hire someone based on what a user's online profile reveals.[98] As of February 29 2008, Facebook has changed its account deletion policies, allowing users to contact Facebook directly to request that a user account be permanently deleted from the website.[99]

See also

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  96. ^ Jones, Harvey, & José Hiram Soltren (2005). "Facebook: Threats to Privacy" (PDF). {{cite journal}}: Cite journal requires |journal= (help)CS1 maint: multiple names: authors list (link) (PDF)
  97. ^ Peterson, Chris (2006-02-13). "Who's Reading Your Facebook?". The Virginia Informer. {{cite news}}: Check date values in: |date= (help)
  98. ^ Ramasastry, Anita (2008-02-29). "On Facebook Forever? Why the Networking Site was Right to Change its Deletion Policies, And Why Its Current Policies Still Pose Privacy Risks". FindLaw. Retrieved 2008-03-15.
  99. ^ "Privacy and Security". Facebook. Retrieved 2008-03-15.

Further reading

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