Facebook

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Facebook, Inc.
Type Private
Founded Cambridge, Massachusetts
(February 4, 2004)[1]
Headquarters Palo Alto, California
Dublin, Ireland (international headquarters for Europe, Africa, Middle East)
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 ▲ 300 million USD (2008 est.)[2]
Employees 700 (November 2008)[3]
Website www.facebook.com
Type of site Social network service
Advertising Banner ads, referral marketing
Registration Required
Available in Afrikaans, Arabic, Bengali, Bulgarian, Catalan, Chinese (simplified), Chinese (Hong Kong), Chinese (Taiwan), Croatian, Czech, Danish, Dutch, English (UK), English (US), English (Pirate), Filipino, Finnish, French (Canada), French (France), German, Greek, Hebrew, Hindi, Hungarian, Icelandic, Indonesian, Italian, Japanese, Korean, Lithuanian, Macedonian, Malay, Malayalam, Norwegian (Bokmål), Polish, Portuguese (Brazil), Portuguese (Europe), Punjabi, Romanian, Russian, Serbian, Slovak, Slovene, Spanish, Spanish (Castile), Swedish, Tamil, Telugu, Thai, Turkish, Vietnamese, Welsh
Launched February 2004
Facebook is a free-access social networking website that is operated and privately owned by Facebook, Inc.[1] Users can join networks organized by city, workplace, school, and region to connect and interact with other people. People can also add friends and send them messages, and update their personal profiles to notify friends about themselves. The website's name stems from the colloquial name of a book given to incoming students at Zuckerberg's high school alma mater, Phillips Exeter Academy. The book shows the faces and names of the school's students and faculty.

Mark Zuckerberg founded Facebook with fellow computer science major students and his roommates Dustin Moskovitz and Chris Hughes while he was a student at Harvard University.[4] Website membership was initially limited to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It later expanded further to include any university student, then high school students, and, finally, to anyone aged 13 and over. The website currently has more than 200 million active users worldwide.[5]

Facebook has met with some controversy over the past few years. It has been blocked intermittently in several countries including Syria[6] and Iran,[7] although Iran later unblocked Facebook in 2009.[8] It has also been banned at many places of work to discourage employees from wasting time using the service.[9] Privacy has also been an issue, and it has been compromised several times. Facebook is also facing several lawsuits from a number of Zuckerberg's former classmates, who claim that Facebook had stolen their source code and other intellectual property.

A February 2009 Compete.com study has ranked Facebook as the most used social network by worldwide monthly active users, followed by MySpace.[10]

Contents [hide]
1 History
2 Financials
3 Website
3.1 Features
3.2 Platform
3.3 iPhone App
4 Reception
4.1 Use by courts
4.2 Criticism
4.2.1 Beacon
4.2.2 Privacy
4.2.3 Pro-mafia groups' case
4.2.4 Phishing
5 Litigation
5.1 ConnectU
5.2 StudiVZ
5.3 Grant Raphael
5.4 Adam Guerbuez
5.5 Alessandro Del Piero
6 See also
7 References
8 External links



History

The Facebook on February 12, 2004The advent of Facebook came about as a spin-off of a Harvard University version of Hot or Not called Facemash.[11] Mark Zuckerberg, while attending Harvard as a sophomore, concocted Facemash on October 28, 2003. Zuckerberg was blogging about a girl and trying to think of something to do to get her off his mind.[12] 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, Zuckerberg hacked into the protected areas of Harvard's computer network and copied the house's private dormitory ID images. "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 ... "[13] The site was quickly forwarded to several campus group list-servers but was shut down a few days later by the Harvard administration. Zuckerberg was charged by the administration with breach of security, violating copyrights and violating individual privacy and faced expulsion, but ultimately the charges were dropped.[14]

The following semester, Zuckerberg founded "The Facebook", originally located at thefacebook.com, on February 4, 2004.[15] “Everyone’s been talking a lot about a universal face book within Harvard,” Zuckerberg told The Harvard Crimson. “I think it’s kind of silly that it would take the University a couple of years to get around to it. I can do it better than they can, and I can do it in a week.”[16] Membership was initially restricted to students of Harvard College, and within the first month, more than half the undergraduate population at Harvard was registered on the service.[17] 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.[18] This expansion continued when it opened to all Ivy League and Boston area schools, and gradually most universities in Canada and the United States.[19] Facebook incorporated in the summer of 2004 and the entrepreneur Sean Parker, who had been informally advising Zuckerberg, became the company's president.[20] In June 2004, Facebook moved its base of operations to Palo Alto, California.[18] The company dropped The from its name after purchasing the domain name facebook.com in 2005 for $200,000.[21]

Facebook launched a high school version in September 2005, which Zuckerberg called the next logical step.[22] At that time, high school networks required an invitation to join.[23] Facebook later expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.[24] Facebook was then opened on September 26, 2006 to everyone of ages 13 and older with a valid e-mail address.[25][26] In October 2008, Facebook announced that it was to set up its international headquarters in Dublin, Ireland.[27]


Financials

Entrance to Facebook's current headquarters in the Stanford Research Park, Palo Alto, California
Another view of Facebook's current headquartersFacebook received its first investment of US$500,000 in June 2004 from PayPal co-founder Peter Thiel.[28] 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.[28][29] A leaked cash flow statement showed that during the 2005 fiscal year, Facebook had a net loss of $3.63 million.[30]

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.[31] Zuckerberg had already said he did not want to sell the company, and denied rumors to the contrary.[32] 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.[33]

In September 2006, serious talks between Facebook and Yahoo! took place concerning acquisition of Facebook, with prices reaching as high as $1 billion.[34] 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.[35]

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."[36]

In September 2007, Microsoft approached Facebook, proposing an investment in return for a 5% stake in the company, offering an estimated $300–500 million.[37] That month, other companies, including Google, expressed interest in buying a portion of Facebook.[38]

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.[39] 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.[40]

In November 2007, Hong Kong billionaire Li Ka-shing invested $60 million in Facebook.[41]

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.[40]

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."[42]


Website

Facebook's homepage features a login form on the top right for existing users and a registration form directly underneath for new visitors.Users can choose fan pages according to their interests to connect and interact with other strangers.[43] Users can set their profiles on private as to prevent acquaintances from contacting them. Users can also set their profiles on public.[44] This allows close friends to send messages and add the user as a friend. It lets users update their personal profiles to notify their close friends about themselves. They can also join networks organized by city, workplace, school, and region to connect and interact with their close friends.[45] Public profiles also allow any stranger or acquaintance to contact the user which results in lack of privacy. Public profiles can be blocked by any user but private profiles cannot.

The website is free to users and generates revenue from advertising including banner ads.[46] Users can create profiles including photos and lists of personal interests, exchange private or public messages, and join groups of friends.[47] By default, the viewing of detailed profile data is restricted to users from the same network and "reasonable community limitations".[48]

Microsoft is Facebook's exclusive partner for serving banner advertising,[49] and as such Facebook only serves advertisements that exist in Microsoft's advertisement inventory. According to comScore, an internet marketing research company, Facebook collects as much data from its visitors as Google and Microsoft, but considerably less than Yahoo!.[50]


Features
Main article: Facebook features
This article may be too long to comfortably read and navigate. Please consider splitting content into sub-articles and using this article for a summary of the key points of the subject.

The media often compares Facebook to MySpace, but one significant difference between the two websites is the level of customization.[51] MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook only allows plain text.[52]

Facebook has a number of features with which users may interact. They include the Wall, a space on every user's profile page that allows friends to post messages for the user to see,[53] Pokes, which allows users to send a virtual "poke" to each other (a notification that tells a user that they have been poked),[54] Photos, where users can upload albums and photos,[55] and Status, which allows users to inform their friends of their whereabouts and actions.[56] A user's Wall is visible to anyone who is able to see that user's profile, depending on 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.[53]

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 of the user's friends.[57] 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).[58] In response to this dissatisfaction, Zuckerberg issued an apology for the site's failure to include appropriate customizable privacy features. Since then, users have been able to control what types of information are shared automatically with friends. Users are now able to prevent friends from seeing updates about certain types of activities, including profile changes, Wall posts, and newly added friends.[59]

One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[60] 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. In the past, all users were limited to 60 photos per album. However, some users report that they are able to create albums with a new limit of 200 photos. It remains unclear why some members have a 200-photo limit while others do not.[61][62][63] 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.[64]

Facebook Notes was introduced on August 22, 2006, a blogging feature that allowed tags and embeddable images. Users were later able to import blogs from Xanga, LiveJournal, Blogger, and other blogging services.[25] During the week of April 7, 2008, Facebook released a Comet-based[65] instant messaging application called "Chat" to several networks,[66] which allows users to communicate with friends and is similar in functionality to desktop-based instant messengers.

Facebook launched Gifts on February 8, 2007, which allows users to send virtual gifts to their friends that appear on the recipient's profile. Gifts cost $1.00 each to purchase, and a personalized message can be attached to each gift.[67][68] On May 14, 2007, Facebook launched Marketplace, which lets users post free classified ads.[69] Marketplace has been compared to Craigslist by CNET, which points out that the major difference between the two is that listings posted by a user on 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.[70]

On July 20, 2008, Facebook introduced "Facebook Beta", a significant redesign of its user interface on selected networks. The Mini-Feed and Wall were consolidated, profiles were separated into tabbed sections, and an effort was made to create a "cleaner" look.[71] After initially giving users a choice to switch, Facebook began migrating all users to the new version beginning September, 2008.[72]

On December 11, 2008, it was announced that Facebook is testing out a new simpler signup process.[73] On June 13, 2009, Facebook introduced a 'usernames' feature, whereby pages can be linked with simpler URLs such as http://www.facebook.com/facebook, as opposed to http://www.facebook.com/profile.php?id=20531316728.[74]


Platform
This article may need to be updated. Please update this article to reflect recent events or newly available information, and remove this template when finished. Please see the talk page for more information.

Facebook mobile graphical user interface
Facebook's former headquarters in downtown Palo Alto, CaliforniaFacebook launched the Facebook Platform on May 24, 2007, providing a framework for software developers to create applications that interact with core Facebook features.[75][76] A markup language called Facebook Markup Language was introduced simultaneously; it is used to customize the "look and feel" of applications that developers create. Using the Platform, Facebook launched several new applications,[75][76] including Gifts, allowing users to send virtual gifts to each other, Marketplace, allowing users to post free classified ads, Events, giving users a method of informing their friends about upcoming events, and Video, letting users share homemade videos with one another.[77][78]

Applications that have been created on the Platform include chess and Scrabble, which both allow users to play games with their friends.[79][80] These games are asynchronous, meaning that a user's moves are saved on the website, allowing the next move to be made at any time rather than immediately after the previous move.[81]

By November 3, 2007, seven thousand applications had been developed on the Facebook Platform, with another hundred created every day.[82] By the second annual f8 developers conference on July 23, 2008, the number of applications had grown to 33,000,[83] and the number of registered developers had exceeded 400,000.[84]

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.[85] Application spam has been considered one of the possible causes to the drop in visitors to Facebook starting from the beginning of 2008, when its growth had fallen from December 2007 to January 2008, its first drop since its launch in 2004.

Facebook Connect was announced for the Xbox 360 and Nintendo DSi on June 1st at E3[86].


iPhone App
Facebook iPhone website was launched August 2007 and as of July 2008 over 1.5 million people use it regularly.[87] A free application for the iPhone and iPod Touch named "Facebook for iPhone" was launched July 2008.[87]


Reception
According to comScore, Facebook is the leading social networking site based on monthly unique visitors, having overtaken main competitor MySpace in April 2008.[88] ComScore reports that Facebook attracted 132.1 million unique visitors in June 2008, compared to MySpace, which attracted 117.6 million.[89]

According to Alexa, the website's ranking among all websites increased from 60th to 7th in terms of worldwide traffic, from September 2006 to September 2007, and is currently 5th.[90] Quantcast ranks the website 15th in US in terms of traffic,[91] and Compete.com ranks it 14th in US.[92] The website is the most popular for uploading photos, with 14 million uploaded daily.[93]

Facebook is the most popular social networking site in several English-speaking countries, including Canada[94] and the United Kingdom.[95] However, in the United States, it has 60 million users compared to MySpace's 73 million.[96] The website has won awards such as placement into the "Top 100 Classic Websites" by PC Magazine in 2007,[97] and winning the "People's Voice Award" from the Webby Awards in 2008.[98] In a 2006 study conducted by Student Monitor, a New Jersey-based company specializing in research concerning the college student market, Facebook was named the second most popular thing among undergraduates, tied with beer and only ranked lower than the iPod.[99]


Use by courts
In December 2008, the Supreme Court of the Australian Capital Territory ruled that Facebook is a valid protocol to serve court notices to defendants. It is believed to be the world's first legal judgement that defines a summons posted on Facebook as legally binding.[100]

In March 2009, the New Zealand High Court associate justice David Glendall allowed for the serving of legal papers on Craig Axe by the company Axe Market Garden via Facebook.[101]


Criticism
Main article: Criticism of Facebook
See also: Use of social network websites in investigations
Facebook has met with some controversy over the past few years. In October 2005, the University of New Mexico blocked access to Facebook from its campus computers and networks.[102] 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 activity not related to the university. The school 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.[103] The Ontario government also blocked access to Facebook for its employees in May 2007, stating the website was "not directly related to the workplace".[104]

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, as well as the identities of her accused killers — despite the fact that under Canada's Youth Criminal Justice Act, it is illegal to publish the name of an underage criminal.[105] While police and Facebook staff attempted to comply with the privacy regulations by deleting posts mentioning her name, they noted it was difficult to effectively police individual users who repeatedly republished the deleted information.[106]

Due to the open nature of Facebook, several countries have banned access to it including Syria and Iran.[107][108] The Syrian government cited the ban was on the premise that the website promoted attacks on authorities.[107][109] The government also feared Israeli infiltration of Syrian social networks on Facebook.[107] Facebook was also used by Syrian citizens to criticize the government, and public criticism of the Syrian government is punishable by imprisonment.[107] In Iran, the website was banned because of fears that opposition movements were being organized on the website; although access has since been reinstated.[108]

On February 5, 2008, Fouad Mourtada, a citizen of Morocco, was arrested for the alleged creation of a faked Facebook profile of Prince Moulay Rachid of Morocco.[110][111][112][113][114][115][116]


Beacon
Main article: Facebook Beacon
Facebook announced Facebook Beacon on November 7, 2007, a marketing initiative that allows websites to publish a user's activities to their Facebook profile as "Social Ads" and promote products.[117] When launching Beacon, Facebook stated "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."[118] After Facebook was criticized for collecting more user information for advertisers than was previously stated, Zuckerberg publicly apologized on December 5, 2007 for the way Facebook launched Beacon, 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."[119][120]


Privacy
Several concerns have emerged regarding the use of Facebook as a means of surveillance and data mining.[121] 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 shell script, as part of a research project on Facebook privacy published on December 14, 2005.[122] The possibility of data mining remains open, as evidenced in May 2008, when the BBC technology program "Click" demonstrated that personal details of Facebook users and their friends could be stolen by submitting malicious applications.[123]

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."[124] Another clause that received criticism concerned Facebook's right to sell a user's data to private companies, stating: "We may share your information with third parties, including responsible companies with which we have a relationship."[125] This concern was 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."[126]

Concerns have also been raised regarding the difficulty of deleting user accounts. Previously, Facebook only allowed users to "deactivate" their accounts so that their profile was no longer visible. However, any information the user had entered into the website and on their profile remained 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".[127] Facebook changed its account deletion policies on February 29, 2008, allowing users to contact the website to request that their accounts be permanently deleted.[128] On May 7, 2009 it was revealed by the New York Times that a bug allowed personal e-mail addresses of Facebook users to be easily accessible. The bug was fixed "within hours of it being reported to us" [129]


Pro-mafia groups' case
In Italy, the discovery of pro-mafia groups[130] caused an alert in the country[131][132][133] and brought the government, after a short debate,[134] to rapidly issue a law which will force ISPs to deny access to entire sites in case of refused removal of illegal contents; the removal can be requested by a prosecutor in any case there is a suspicion that criminal speech (apology or incitement to crime) is published on a website. The amendment was passed by the Senate on February 5, 2008, and now needs to be passed unchanged[135] by the Chamber of Deputies to become immediately effective.

Facebook and other websites, Google included,[136] criticized the amendment emphasizing the eventual effects on the freedom of speech of those users who do not violate any law.


Phishing
In May 2009, Facebook users all over the world suffered a massive phishing campaign, launched by Russian hackers from servers in Latvia and China, that led to thousands of accounts being hijacked.[137] Facebook was criticized for its late reaction to this issue and the fact that initially it merely tried to block the attack, rather than notifying users of the situation.


Litigation

ConnectU
Main article: Criticism of Facebook#Connectu.com lawsuit
In 2004 ConnectU, a company founded by classmates of Zuckerberg, filed a lawsuit against Facebook, claiming that Zuckerberg had broken an oral contract for them to build the Facebook site, copied their idea,[138] and used source code that belonged to them.[139][140][141][142] The parties reached a confidential settlement agreement in February 2008.[143] In 2008 they attempted unsuccessfully to rescind the settlement, claiming that Facebook had understated its valuation in connection with its settlement negotiations.[144][145][146][147][148] Despite the confidentiality agreement, a law firm that represented ConnectU inadvertently disclosed the $65 million settlement amount.[149]


StudiVZ
On July 18, 2008, Facebook sued StudiVZ in a California federal court, alleging that StudiVZ copied its look, feel, features and services. StudiVZ denied the claims, and asked for declaratory judgment at the District Court in Stuttgart, Germany.[150]


Grant Raphael
On July 24, 2008 the High Court in London ordered Grant Raphael to pay GBP £22,000 (about USD $31,500 at the February 2009 exchange rate) for breach of privacy and libel. Raphael had posted a fake Facebook page purporting to be that of a former schoolfriend and business colleague, Mathew Firsht, with whom Raphael had fallen out in 2000. The fake page claimed that Firsht was homosexual and untrustworthy. The case is believed to be the first successful invasion of privacy and defamation verdict against someone over an entry on a social networking site.[151][152][153][154][155][156]


Adam Guerbuez
Facebook won a lawsuit against Canadian Adam Guerbuez, of Montreal, worth $873 million. Guerbuez had spammed the website with various advertisements including penis enhancements and marijuana. Guerbuez founded Atlantis Blue Capital.[157]


Alessandro Del Piero
On February 9, 2009 it was reported that Juventus football (soccer) player Alessandro Del Piero was suing Facebook over a fake profile bearing his name that links to Nazi propaganda sites. The Italian footballer was said to be aggrieved that the bogus account, which carries his picture, implies neo-Nazi sympathies. Del Piero stated he's never had a Facebook profile.[158]


See also
Companies portal
MySpace
Facebook features
Criticism of Facebook
Facebook Beacon

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External links
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