User:Echan3/sandbox

History of Facebook

See also: Timeline of Facebook

This is the history of the social network service, Facebook.

Facemash

Mark Zuckerberg created Facebook in his Harvard dorm room.

Facemash is the Facebook’s predecessor opened on October 28, 2003. Initially, the website was invented by a Harvard student, Mark Zuckerberg, and three of his classmates Eduardo Saverin, Chris Hughes and Dustin Moskovitz. The website was originally called 'Facemash'. Mark Zuckerberg wrote the software for the Facemash website when he was in his second year of university. The website, was inspired by Zuckerberg’s sense of humor and was set as a type of “hot or not” game for Harvard students. The website allowed visitors to compare two student pictures side-by-side and let them choose who was “hot” and who was “not”.

That night, Zuckerberg wrote the following blog entries:

I'm a little intoxicated, not gonna lie. So what if it's not even 10 pm and it's a Tuesday night? What? The Kirkland [dorm] facebook is open on my desktop and some of these people have pretty horrendous facebook pics. I almost want to put some of these faces next to pictures of farm animals and have people vote on which is more attractive.

— 9:48 pm

Yea, it's on. I'm not exactly sure how the farm animals are going to fit into this whole thing (you can't really ever be sure with farm animals...), but I like the idea of comparing two people together.

— 11:09 pm

Let the hacking begin.

— 12:58 am

According to The Harvard Crimson, Facemash "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, Mark Zuckerberg hacked into Harvard’s security network and copied the student ID images used by dormitories and used them to populate his Facemash website.

Harvard at that time did not have a student directory with photos and basic information, and with the initial site generated 450 visitors and 22,000 photo-views in its first four hours online. That the initial site mirrored people’s physical community—with their real identities—represented the key aspects of what later became Facebook.

"Perhaps Harvard will squelch it for legal reasons without realizing its value as a venture that could possibly be expanded to other schools (maybe even ones with good-looking people...)," Zuckerberg wrote in his personal blog. "But one thing is certain, and it’s that I’m a jerk for making this site. Oh well. Someone had to do it eventually..." The site was quickly forwarded to several campus group list-servers. However, the website was shut down by Harvard executives a few days after it opened. Mark Zuckerberg faced charges of violating copyrights, breach of security, and violating individual privacy for stealing the student pictures that he used to populate the website. He later got explosion from Harvard University for his wrong actions. However, at the end, all 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, with one image per page along with a comment section. He opened the site up to his classmates and people started sharing their notes. "The professor said it had the best grades of any final he’d ever given. This was my first social hack. With Facebook, I wanted to make something that would make Harvard more open," Zuckerberg said in a TechCrunch interview.

On Oct 25, 2010, entrepreneur and banker Rahul Jain auctioned off FaceMash.com to an unknown buyer for $30,201.

thefacebook.com

thumb|left|The homepage of Thefacebook on February 12, 2004

In January 2004, in the following semester at Harvard University, Mark Zuckerberg began writing computer codes for a new website, known as 'thefacebook'. He said in an editorial, The Harvard Crimson, that he was inspired to make Facebook from the incident of Facemash. He said to the editorial, "It is clear that the technology needed to create a centralized Website is readily available...the benefits are many." On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com. He told The Harvard Crimson editorial, "Everyone’s been talking a lot about a universal face book within Harvard. I think it’s kind of silly that it would take the University a couple of years to get around to it as I can do it better than they can, and I can do it in a week." Zuckerberg gave his opinion to the editorial about his plan to create a universal website that can contact people around the university. According to his roommate, Dustin Moskovitz,"When Mark finished the site, he told a couple of friends... then one of them suggested putting it on the Kirkland House online mailing list, which was...three hundred people." Dustin Moskovitz continued to explain the process of how Facebook was a success and that, “By the end of the night, we were...actively watching the registration process. Within twenty-four hours, we had somewhere between twelve hundred and fifteen hundred registrants."

Just six days after the launch of the site, three Harvard University seniors,Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra, accused Zuckerberg of intentionally misleading them into believing that he would help them build a social network called HarvardConnection.com, but he used their idea instead to build a competing product.

The three complained to the Harvard Crimson and the newspaper began an investigation. Zuckerberg knew about the investigation so he used TheFacebook.com, to find members in the site who identified themselves as members of the Crimson. He examined a history of failed logins to see if any of the Crimson members have ever entered an incorrect password into TheFacebook.com. In the cases in which they had failed to login, Mark tried to use them to access the Crimson members' Harvard email accounts and he was successful in accessing two of them. In the end, three of Crimson members’ filed a lawsuit against Zuckerberg and was settled after. The three later filed a lawsuit against Zuckerberg, later settling.

Membership was initially restricted to students of Harvard University. Within the first month, more than half the undergraduate population at Harvard was registered on the service. Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum(graphic artist), and Chris Hughes soon joined Zuckerberg to help promote the website.In March 2004, Facebook expanded to Stanford,Columbia, and Yale. This expansion continued when it opened to all Ivy League and Boston area schools. It gradually reached most universities in Canada and the United States. Facebook was incorporated in the summer of 2004 and the entrepreneur Sean Parker, who had been informally advising Zuckerberg, became the company's president. In June 2004, Facebook moved its base of operations to Palo Alto, California. The company dropped ‘The’ from its name after purchasing the domain name facebook.com in 2005 for $200,000.[23]

Facebook

Total active users

Date	Users (in millions)	Days later	Monthly growth
February 4, 2004	0	—	—
August 26, 2008	100	1,665	178.38%
April 8, 2009	200	225	13.33%
September 15, 2009	300	160	9.38%
February 5, 2010	400	143	6.99%
July 21, 2010	500	166	4.52%
January 5, 2011	600	168	3.57%
May 30, 2011	700	145	3.45%
September 22, 2011	800	115	3.73%
April 24, 2012	900	215	1.74%

On October 1, 2005, Facebook expanded to twenty-one universities in the United Kingdom, the entire Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM) system in Mexico, the entire University of Puerto Rico and Interamerican University of Puerto Rico network in Puerto Rico, and the whole University of the Virgin Islands network in the U.S. Virgin Islands. Facebook launched a high school version in September 2005, which Zuckerberg called the next logical step. At that time, high school networks required an invitation to join. Facebook later expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft. On December 11, 2005, universities in Australia and New Zealand were added to the Facebook network, bringing its size to 2,000+ colleges and 25,000 + high schools throughout the United States, Canada, Mexico, the United Kingdom, Australia, New Zealand, and Ireland. Facebook was then opened on September 26, 2006, to everyone of ages 13 and older with a valid e-mail address. In October 2008, Facebook announced that it was to set up its international headquarters in Dublin, Ireland.

In 2010 Facebook began to pro-actively involve its users in running the website by inviting them to become beta testers after passing a question-and-answer-based selection process, and a set of Facebook Engineering Puzzles where users would solve computational problems which gave them an opportunity to be hired by facebook.

As of July 2010, Facebook.com was the top social network across eight individual markets in the Southeast Asia/Oceania region (Philippines, Australia, Indonesia, Malaysia, Singapore, New Zealand, Hong Kong and Vietnam), while other brands commanded the top positions in certain markets, including Google-owned Orkut in India and Brazil, Mixi in Japan, Renren in China (where Facebook is currently inaccessible), CyWorld in South Korea and Yahoo!’s Wretch.cc in Taiwan. Additionally, Facebook has become the largest online photo host, being cited by Facebook application and online photo aggregator Pixable as expecting to have 100 billion photos by summer 2011

Facebook continues to adhere to the technology that seamlessly embeds itself into the daily lives of users. Today, Facebook has over 800 million monthly active users according to their own statistics. Over 350 million of these participants are accessing Facebook through their mobile phones. Facebook has successfully integrated various mobile platforms that are modelled for iPhones, iPads, androids, blackberries and other forums to provide access to the site at all times. In total, 33% of Facebook traffic comes from mobile phone accessibility. These totals are expected to increase with the newly released versions of the mobile site and the introduction of iOS apps. Over 90% of iPhone owner use Facebook over mobile networks.

Since the initial website was created, Facebook has changed its formatting many times and revamped the overall appearance of people's individual profiles. Most recently it has introduced a completely new type of profile called Facebook Timeline. This essentially turns user profiles into a visual timeline of your life complete with all photos, events birthdays and friendships. Facebook continuously changes its formatting to suit it's users and will continue to do so.

Financials

Facebook's former headquarters in downtown Palo Alto, California.

Facebook received its first investment of US$500,000 in June 2004 from PayPal co-founder Peter Thiel, in exchange for 7% of the company. This was followed a year later by $12.7 million in venture capital from Accel Partners, and then $27.5 million more from Greylock Partners. A leaked cash flow statement showed that during the 2005 fiscal year, Facebook had a net loss of $3.63 million.

With the sale of social networking website, MySpace, to News Corp on July 19, 2005, rumors surfaced about the possible sale of Facebook to a larger media company. Zuckerberg had already stated that he did not want to sell the company, and denied rumors to the contrary. On March 28, 2006, BusinessWeek reported that a potential acquisition of Facebook was under negotiation. Facebook reportedly declined an offer of $750 million from an unknown bidder, and it was rumored the asking price rose as high as $2 billion.

In September 2006, serious talks between Facebook and Yahoo! took place concerning acquisition of Facebook, with prices reaching as high as $1 billion. Thiel, by then a board member of Facebook, indicated that Facebook's internal valuation was around $8 billion based on their projected revenues of $1 billion by 2015, comparable to Viacom's MTV brand, a company with a shared target demographic audience.

On July 17, 2007, Zuckerberg said that selling Facebook was unlikely because he wanted to keep it independent, saying "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." In September 2007, Microsoft approached Facebook, proposing an investment in return for a 5% stake in the company, offering an estimated $300–500 million. That month, other companies, including Google, expressed interest in buying a portion of Facebook.

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. However, Microsoft bought preferred stock that carried special rights, such as "liquidation preferences" that meant Microsoft would get paid before common stockholders if the company is sold. Microsoft's purchase also included rights to place international ads on Facebook. In November 2007, Hong Kong billionaire Li Ka-shing invested $60 million in Facebook.

Entrance to Facebook's current headquarters in the Stanford Research Park, Palo Alto, California.

In August 2008, BusinessWeek reported that private sales by employees, as well as purchases by venture capital firms, had and were being done at share prices that put the company's total valuation at between $3.75 billion and $5 billion. In October 2008, Zuckerberg said "I don't think social networks can be monetized in the same way that search did... In three years from now we have to figure out what the optimum model is. But that is not our primary focus today."

In August 2009, Facebook acquired social media real-time news aggregator FriendFeed, a startup created by the former Google employee and Gmail's first engineer Paul Buchheit who, while at Google, coined the phrase "Don't be evil". In September 2009, Facebook claimed that it had turned cash flow positive for the first time. In February 2010, Facebook acquired Malaysian contact-importing startup Octazen Solutions. On April 2, 2010, Facebook announced acquisition of photo-sharing service called Divvyshot for an undisclosed amount. In June 2010, an online marketplace for trading private company stock reflected a valuation of $11.5 billion.

At the All Things Digital conference in June 2010, Zuckerberg was asked if he expected to remain CEO if the company went public. Zuckerberg said he did, adding that he doesn't "think about going public ... much." He said he did not have a date in mind for a potential IPO. In early 2012, Facebook disclosed that its profits had jumped 65% to $1 billion in the previous year as its revenue which is mainly from advertising had jumped almost 90% to $3.71 billion Facebook also reported that 56% of its advertising revenue comes from the U.S alone, it also reported that 12% of its revenue comes from zynga the popular social network game development company. Payments and other fees were $557 million up from $106 million the previous year

Yahoo sues Facebook

Monday, March 12, 2012, Yahoo! filed a suit against Facebook weeks before the scheduled Facebook initial public offering. Yahoo in its court filing said that Facebook had infringed on ten of its patents covering advertising, privacy controls and social networking. Yahoo had threatened to sue Facebook a month before the filing insisting that the social network license its patents. But Facebook had previously vowed to defend itself against what it called “puzzling actions” by Yahoo. A spokesperson for Facebook issued a statement saying "We're disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation". Yahoo has been said to tie many of its online services to Facebook which has further helped them to attract more customers. Many analysts have said that the patent suit may end in a settlement or in a licensing deal. They also add that the patent lawsuit will really cast a spotlight on Facebook’s weaknesses as the company is in its process of completing an IPO in the spring of 2012. In 2011, Facebook had owned 56 US patents which seems to be relatively small compared to Yahoo which has more than a thousand patents. Yahoo had defended the lawsuit saying that it had invested “substantial resources in research and development” over the years leading its technology patents that many other businesses have licensed. Yahoo also adds in the filing that without their innovations, Facebook and other websites would not enjoy the repeat visitors or the large advertising revenue they receive. The lawsuit also claims that Yahoo’s patents cover basic social networking ideas such as customizing website users’ experiences to their needs, it also adds that the patents cover ways of generating ads that appeal to individual users which in turn increases advertising revenues for the companies. Yahoo says that Facebook was one of the worst performing sites for advertising before it began to use the ideas of Yahoo. The lawsuit was filed in a U.S federal court in San Jose, California. Yahoo is demanding unspecified damages and a jury trial. Facebook on 27th March,2012 said that the dispute with Yahoo could have a negative impact on it's business as it moves on with its initial public offering. In its filing, Facebook said “This litigation is still in its early stages. If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition or results of operations.”

Facebook's IPO

Facebook took social media by storm after the company filed the preliminary prospectus for its long waited initial public offering, which the company is seeking to raise $5 billion. Inside the document, there are some huge numbers about the company were revealed. The number goes from $845 million active users to $2.7 billion daily likes and comments. After the initial news of the filling broke out, a more extensive look of the document reveals hard evidence of the company’s business, competition, growth and something about what’s in store for the future. In some particular terms, “advertising” and “mobile” show more than 100 times throughout.

The New York Post reported that Facebook CEO Mark Zuckerberg has told Morgan Stanley, Goldman Sachs, JP Morgan Chase and other banks that are involved the value of $75 billion to $100 billion IPO in his company, which is use to stop leaking details to the press about the upcoming event. “We often talk about inventions like the printing press and the television- by simple making communication more efficient, they led to a complete transformation of many important parts of society. They have more people a voice. They encouraged progress. They change the way society was organized. They brought us closer together,” said Mark Zuckerberg in the Facebook IPO documents, revealing some interesting tidbits.

In Zuckerberg’s four-page message to potential investors, it provides a glimpse into what a 27-year-old CEO believes are Facebook’s priorities moving forward. To most of the users, Facebook act as a simple space to socialize with friends and raise digital farms. However, the recreational utility is way far from the limits Zuckerberg. He writes that “through the power of sharing content, Facebook has the potential to increase understanding of other by people across the planet.”

Here are some of the quotes from Zuckerberg’s letter of the company’s IPO, which can explain the company’s main values.

“People sharing more- even if just with their close friends or families- creates a more open culture and leads to a better understanding of the lives and perspectives of others.”

“We think a more open and connected world will help create a stronger economy with more authentic business that build better products and services.”

“We don’t build services to make money; we make money to build better services.”

“We have a saying: ‘Move fast and break things.’ The idea is that if you never break anything, you are probably not moving fast enough.”

China Censorship on Facebook

In 2008, the Internet Censorship in the People’s Republic of China (PRC) had blocked people from using the internet and also censored many social networks such as Facebook, Twitter, Youtube and Wikipedia. The issue rose in 2008, around the Olympics time, when there was tension between China and Tibet. When the Olympics ended and the government has calmed down, the government unblocked some social media sites, however a viral video regarding a Buddhist monk being beaten up by a Chinese armed man was found on Youtube and other video sharing sites, the government quickly censors the internet again and also some of the social networks as well.

In 2009, the riots in Urumqi, Xinjiang or called the Tibet of 2009, caused the Chinese government to focus more on the censorship of the internet and social networks. Facebook was one of the many censored social networks that the Chinese government wanted to prevent people to go on, because of the tension from international social and political criticism from people. Even though the Chinese government censored many influential social networks, the Chinese government still allowed some Chinese social network sites, such as Youku, the Chinese version of Youtube or Xiaonei, the Chinese version of Facebook, for users to use. The sites are closely monitored and any controversial about the government would be quickly taken down.

In 2010, Mark Zuckerberg, the Chief executive of Facebook, went to Beijing,China for a vacation where he met with some of China's top technology executives. On the Monday of the week, he met with Robin Li, CEO of Baidu Inc., at the Chinese search company's headquarters. On the Wednesday, he visited the Sina Corp., a leading Chinese Web portal, and also met with CEO, Charles Chao. On the following Tuesday, he met with Wang Jianzhou, chairman of state-owned telecommunications carrier of China Mobile Ltd. His trip was described by a spokeswoman of his company that his trip was basically to learn and study more about the Chinese market. There was no discussion about any business issues; however he had openly announced that he wanted to get into the Chinese market although Facebook was censored for a year already. He stated that he was looking for the "right partnerships that we would need to do in China to succeed on our terms." Mark Zuckerberg takes an hour everyday to learn Chinese and believes that, "It's such an important part of the world. I mean, how can you connect the world if you leave out China's population of more than one billion people.” InFacebook, the social network is made with numerous different languages and has millions of active users, but there are fewer users from China, due to other competitive social networks and the government internet censorship on the site. Although Facebook wanted the Chinese government to give the social network a chance, the social network in China is not as famous and Facebook would encounter more challenges and difficulties when allowing the Chinese government to access the social network. Mark Zuckerberg has once mentioned that, “Facebook is willing to make exceptions to its policy of openness in certain markets, such as in Germany, where Nazi content is prohibited.” With Facebook willing to take any challenges from countries.