Facebook, Inc. history, profile and history video
Facebook, Inc. is a social networking service and website. It aims to make the world more open and connected. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about. Developers can use the Facebook Platform to build applications (apps) and websites that integrate with Facebook to reach its global network of users and to build products that are more personalized, social, and engaging. The company offers advertisers a unique combination of reach, relevance, social context, and engagement to enhance the value of their ads. Its services include timeline, news feed, messages, lists, ticker and mobile apps. Facebook was founded by Mark Elliot Zuckerberg, Dustin Moskovitz, Chris R. Hughes and Eduardo Saverin on February 4, 2004 and is headquartered in Menlo Park, CA.“
Before going public
Zuckerberg wrote a program called Facemash 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”
To accomplish this, Zuckerberg hacked into protected areas of Harvard’s computer network and copied private dormitory ID images. Harvard did not have a student “Facebook” (a directory with photos and basic information) at the time, although individual houses had been issuing their own paper facebooks since the mid-1980s. Facemash attracted 450 visitors and 22,000 photo-views in its first four hours online.
The site was quickly forwarded to several campus group list-servers, but was shut down a few days later by the Harvard administration. Zuckerberg faced expulsion and was charged by the administration with breach of security, violating copyrights, and violating individual privacy. Ultimately, the charges were dropped. Zuckerberg expanded on this initial project that semester by creating a social study tool ahead of an art history final. He uploaded 500 Augustan images to a website, and each image was featured with a corresponding comments section. He shared the site with his classmates and people started sharing notes.
The following semester, Zuckerberg began writing code for a new website in January 2004. He said he was inspired by an editorial about the Facemash incident in The Harvard Crimson. On February 4, 2004, Zuckerberg launched “Thefacebook”, originally located at thefacebook.com.
Six days after the site launched, three Harvard seniors (Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra) accused Zuckerberg of intentionally misleading them into believing he would help them build a social network called HarvardConnection.com. They claimed he was instead using their ideas to build a competing product. The three complained to The Harvard Crimson and the newspaper began an investigation. They later filed a lawsuit against Zuckerberg, subsequently settling in 2008 for 1.2 millionshares (worth $300 million at Facebook’s IPO).
Membership was initially restricted to students of Harvard College; within the first month, more than half the undergraduates at Harvard were registered on the service. Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic artist), and Chris Hughes joined Zuckerberg to help promote the website. In March 2004, Facebook expanded to the universities of Columbia, Stanford, and Yale. It later opened to all Ivy League colleges, Boston University, New York University, MIT, and gradually most universities in Canada and the United States.
In mid-2004, entrepreneur Sean Parker (an informal advisor to Zuckerberg) became the company’s president. In June 2004, Facebook moved its operations base to Palo Alto, California. It received its first investment later that month from PayPal co-founder Peter Thiel. In 2005, the company dropped the from its name after purchasing the domain name facebook.com for $200,000.
In May 2005, Accel partners invested $12.7 million in Facebook, and Jim Breyer added $1 million of his own money. A January 2009 Compete.com study ranked Facebook the most used social networking service by worldwide monthly active users. Entertainment Weekly included the site on its end-of-the-decade “best-of” list, saying, “How on earth did we stalk our exes, remember our co-workers’ birthdays, bug our friends, and play a rousing game of Scrabulous before Facebook?”
A high-school version of the site was launched in September 2005, which Zuckerberg called the next logical step.(At the time, high-school networks required an invitation to join.) Facebook expanded membership eligibility to employees of several companies, includingApple Inc. and Microsoft. On September 26, 2006, Facebook was opened to everyone at least 13 years old with a valid email address.
In late 2007, Facebook had 100,000 business pages (pages which allowed companies to promote themselves and attract customers). These started as group pages, but a new concept called company pages was planned.Pages began rolling out for businesses in May 2009.
On October 24, 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion. Microsoft’s purchase included rights to place international adverts on the social networking site.In October 2008, Facebook announced that it would set up its international headquarters in 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 privately held companies’ shares), Facebook’s value was $41 billion; it slightly surpassed eBay’s to become the third largest American web company after Google and Amazon.com.
Traffic to Facebook increased steadily after 2009. More people visited Facebook than Google for the week ending March 13, 2010.
In March 2011, it was reported that Facebook takes approximately 20,000 profiles offline every day for 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 its headquarters to the former Sun Microsystems campus in Menlo Park.
Release of statistics by DoubleClick showed that Facebook reached one trillion page views in the month of June 2011, making it the most visited website tracked by DoubleClick.
According to the Nielsen Media Research study, released in December 2011, Facebook is the second most accessed website in the US (behind Google).
Facebook eventually filed for an initial public offering on February 1, 2012; it is headquartered in Menlo Park, California. Facebook held an initial public offering on May 17, 2012, negotiating a share price of $38 apiece. The company was valued at $104 billion, the largest valuation to date for a newly listed public company. Facebook Inc. began selling stock to the public and trading on the NASDAQ on May 18, 2012. Based on its 2012 income of US$5 billion, Facebook joined theFortune 500 list for the first time on the list published in May 2013, being placed at position 462.
In March 2012, Facebook announced App Center, a store selling applications that operate via the site. The store will be available to iPhone, Android and mobile web users.
In 2012, Facebook was valued at $104 billion, and by January 2014 its market capitalization had risen to over $134 billion. At the end of January 2014, 1.23 billion users were active on the website every month, while on December 31, 2013, 945 million of this total were identified by the company as mobile users. The company celebrated its tenth anniversary in the week of February 3, 2014. In each of the first three months of 2014, over one billion logged into their Facebook account on a mobile device.
On January 2014, during the week previous to the company’s tenth anniversary, chief operating officer of Facebook, Sheryl Sandberg, clarified: “He [Mark] always said Facebook was started not just to be a company, but to fulfill a vision of connecting the world”.
Initial public offering
Facebook filed their S1 document with the Securities and Exchange Commission on February 1, 2012. The company applied for a US$5 billion initial public offering (IPO); one of the biggest in the history of technology and the biggest in Internet history.Facebook valued its stock at $38 a share which priced the company at $104 billion – the largest valuation to date for a new public company. The IPO raised $16 billion, making it the third largest in U.S. history. The shares began trading on May 18; the stock struggled to stay above the IPO price for most of the day, but set a record for the trading volume of an IPO (460 million shares). The first day of trading was marred by technical glitches that prevented orders from going through; only the technical problems and artificial support from underwriters prevented the stock price from falling below the IPO price on the day.
It was revealed later that Facebook’s lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) cut their earnings forecasts for the company in the middle of the IPO roadshow. The stock continued its freefall in subsequent days, closing at 34.03 on May 21 and 31.00 on May 22. A ‘circuit breaker’ was used in an attempt to slow down the stock price’s decline. Securities and Exchange Commission Chairman Mary Schapiro and Financial Industry Regulatory Authority (FINRA) Chairman Rick Ketchum called for a review of the circumstances surrounding the IPO.
Facebooks’ IPO is now under investigation and has been compared to pump and dump schemes. A class-action lawsuit was filed in May 2012 due to the trading glitches, which led to botched orders. Apparently, the glitches prevented a number of investors from selling the stock during the first day of trading while the stock price was falling – forcing them to incur bigger losses when their trades finally went through.
Lawsuits have been filed alleging that an underwriter for Morgan Stanley selectively revealed adjusted earnings estimates to preferred clients. The other underwriters (MS, JPM, GS) and Facebook’s CEO and board are also facing litigation. It is believed that adjustments to earnings estimates were communicated to the underwriters by a Facebook financial officer, who used the information to cash out on their positions while leaving the general public with overpriced shares.
By the end of May 2012, the stock lost over a quarter of its starting value, which led to the Wall Street Journal calling the IPO a “fiasco.”
After going public
In July 2012, Facebook added a same-sex marriage icon to its timeline feature. On August 23, 2012, Facebook released an update to its iOS app (version 5.0), which changed how data was collected and displayed to make it faster. On January 15, 2013, Facebook announced Graph Search, which provides users with a “precise answer” rather than a link to an answer by leveraging the data present on its site. Facebook emphasized that the feature would be “privacy-aware,” returning only results from content already shared with the user. The company is the subject of a lawsuit by Rembrandt Social Media for patents involving the “Like” button. On April 3, 2013, Facebook unveiled Home, a user-interface layer for Android devices offering greater integration with the site. HTC announced the HTC First, a smartphone with Home pre-loaded. On April 15, 2013, Facebook announced an alliance across 19 states with the National Association of Attorneys General to provide teenagers and parents with information on tools to manage social networking profiles. On April 19, 2013, Facebook officially modified its logo to remove the faint blue line at the bottom of the “F” icon. The letter F moved closer to the edge of the box.
Following a campaign by 100 advocacy groups, Facebook agreed to update its policy on hate speech. The campaign highlighted content promoting domestic and sexual violence against women, and used over 57,000 tweets and more than 4,900 emails that caused withdrawal of advertising from the site by 15 companies, including Nissan UK, House of Burlesque and Nationwide UK. The social media website initially responded by stating that “while it may be vulgar and offensive, distasteful content on its own does not violate our policies”. It decided to take action on May 29, 2013 after it “become clear that our systems to identify and remove hate speech have failed to work as effectively as we would like, particularly around issues of gender-based hate.”
On June 12, 2013, Facebook announced on its newsroom that it was introducing clickable hashtags to help users follow trending discussions or search what others are talking about on a topic. A July 2013 Wall Street Journal article identified the Facebook IPO as the cause of a change in the U.S.’ national economic statistics, as the company home (San Mateo County, California) became the top wage-earning county in the country after the fourth quarter of 2012. The Bureau of Labor Statistics reported that the average weekly wage in the county was US$3,240, 107% higher than the previous year. It noted the wages were “the equivalent of $168,000 a year, and more than 50% higher than the next highest county, New York County (better known as Manhattan), which came in at $2,107 a week, or roughly $110,000 a year.”
Russian internet firm Mail.Ru sold its Facebook shares for US$525 million on September 5, 2013, following its initial US$200 million investment in 2009. Partly owned by Russia’s richest man Alisher Usmanovhe, the firm owned a total of 14.2 million remaining shares prior to the sale. In the same month, the Chinese government announced that it will lift the ban on Facebook in the Shanghai Free Trade Zone “to welcome foreign companies to invest and to let foreigners live and work happily in the free-trade zone.” Facebook has been blocked in China since 2009.
Facebook is part of The Alliance for Affordable Internet (A4AI) (which was launched in October 2013). The A4AI is a coalition of public and private organisations that includesGoogle, Intel and Microsoft. Led by Sir Tim Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the developing world, where only 31% of people are online. Google will help to decrease Internet access prices so that they fall below the UN Broadband Commission’s worldwide target of 5% of monthly income.
A Reuters report, published on December 11, 2013, stated that Standard & Poor’s announced the placement of Facebook onto its S&P 500 index “after the close of trading on December 20.”
Facebook announced Q4 2013 earnings of US$523 million (20 cents per share), an increase of $64 million since the previous year. In February 2014, Facebook announced that it would be buying mobile messaging company Whatsapp for $19 billion in cash and stock. In June 2014, Facebook announced to acquire mobile data plan firm Pryte, a Finnish company that aims to make it easier for mobile phone users in under-developed parts of the world to use wireless Internet apps.”
*Information from Forbes.com and Wikipedia.org
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