Facebook
wikipedia | 2013-08-02 11:57

 
Facebook is an online social networking service, whose name stems from the colloquial name for the book given to students at the start of the academic year by some university administrations in the United States to help students get to know each other. It was founded in February 2004 by Mark Zuckerberg with his college roommates and fellow Harvard University students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It gradually added support for students at various other universities before opening to high school students, and eventually to anyone aged 13 and over. Facebook now allows any users who declare themselves to be at least 13 years old to become registered users of the site.

Users must register before using the site, after which they may create a personal profile, add other users as friends, and exchange messages, including automatic notifications when they update their profile. Additionally, users may join common-interest user groups, organized by workplace, school or college, or other characteristics, and categorize their friends into lists such as People From Work or Close Friends. As of September 2012, Facebook has over one billion active users. According to a May 2011 Consumer Reports survey, there are 7.5 million children under 13 with accounts and 5 million under 10, violating the site's terms of service.

In May 2005, Accel partners invested $12.7 million in Facebook, and Jim Breyeradded $1 million of his own money to the pot. A January 2009 Compete.com study ranked Facebook as the most used social networking service by worldwide monthly active users.[13] 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[14] Critics, such as Facebook Detox,state that Facebook has turned into a national obsession in the United States, resulting in vast amounts of time lost and encouraging narcissism. Quantcast estimates Facebook has 138.9 million monthly unique U.S. visitors in May 2011.[16] According to Social Media Today, in April 2010 an estimated 41.6% (129.5 million) of the U.S. population had a Facebook account.Nevertheless, Facebook's market growth started to stall in some regions, with the site losing 7 million active users in the United States and Canada in May 2011. Facebook eventually filed for an initial public offering on February 1, 2012, and was headquartered in Menlo Park, California.[2] Facebook Inc. began selling stock to the public and trading on the NASDAQ on May 18, 2012

Main articles History of Facebook and Timeline of Facebook
Mark Zuckerberg wrote Facemash, the predecessor to Facebook, 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 the protected areas of Harvard's computer network and copied the houses' private dormitory ID images. Harvard at that time did not have a student facebook (a directory with photos and basic information), though 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, by uploading 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 following semester, Zuckerberg began writing code for a new website in January 2004. He was inspired, he said, by an editorial in The Harvard Crimson about the Facemash incident. 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, while he was instead using their ideas to build a competing product.The three complained to the Harvard Crimson, and the newspaper began an investigation. The three later filed a lawsuit against Zuckerberg, subsequently settling.The agreed settlement was for 1.2m shares which were worth $300m at Facebook's IPO.

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. 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. It soon opened to the other Ivy League schools, Boston University, New York University, MIT, and gradually most universities in Canada and the United States.

In mid-2004, 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.It received its first investment later that month from PayPal co-founder Peter Thiel.The company dropped The from its name after purchasing the domain name facebook.com in 2005 for $200,000.

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.Facebook was then opened on September 26, 2006, to everyone of age 13 and older with a valid email address.

Late in 2007, Facebook had 100,000 business pages, allowing companies to attract potential customers and tell about themselves. These started as group pages, but a new concept called company pages was planned.

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.[52] Microsoft's purchase included rights to place international ads on Facebook.[53] In October 2008, Facebook announced that it would set up its international headquarters in Dublin, Ireland.[54] In September 2009, Facebook said that it had turned cash-flow positive for the first time.[55] In November 2010, based on SecondMarket Inc., an exchange for shares of privately held companies, Facebook's value was $41 billion (slightly surpassing eBay's) and it became the third largest U.S. Web company after Google and Amazon. 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 removes approximately 20,000 profiles from the site every day for various 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 to its new headquarters, the former Sun Microsystems campus in Menlo Park, California.

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 of those 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).
In March 2012, Facebook announced App Center, an online mobile store which sells applications that connect to Facebook. The store will be available to iPhone, Android and mobile web users.

Facebook, Inc. held an initial public offering on May 17, 2012, negotiating a share price of $38 apiece, valuing the company at $104 billion, the largest valuation to date for a newly listed public company.

On July 2012, Facebook added a gay marriage icon to its timeline feature.

On August 23, 2012, Facebook released the much anticipated update to its iOS app, version 5.0. The app, which did not receive positive sentiments from its users, was rebuilt from the ground up; the app no longer uses page views which made it slow in the past but now utilizes code that uses native elements of iOS.

On January 15, 2013, Facebook announced their new product Graph Search, which provides users with a “precise answer” rather than a link to an answer by leveraging the data already 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 subject of a lawsuit by Rembrandt Social Media which is also suing AddThis for the use of patents belonging to deceased Dutch Programmer Joannes Jozef Everardus van Der Meer which involve the Like button.

On April 3, 2013, Facebook unveiled Home, a user interface layer for Android devices offering heavy integration with the service, for an initial release on April 12, 2013. HTC also announced a new smartphone with Home pre-loaded, the HTC First.

On April 15th, 2013 Facebook teamed up the Attorneys General, announcing it's alliance with the National Association of Attorneys General to help provide teens and parents more information on tools that can help manage profiles on Facebook. The partnership between Facebook and the Attorneys General will take place in 19 states.

On April 19th, 2013 Facebook officially updated their logo. Facebook's new logo no longer includes the faint blue line at the bottom of their F icon. The letter is also pulled closer to the edge of the box.

Initial public offering
Main article Facebook IPO
An electronic billboard on the Thomson Reuters building welcomes Facebook to the Nasdaq.

Facebook filed their S1 document with the Securities and Exchange Commission (SEC) on February 1, 2012. The company filed for a US$5 billion initial public offering (IPO), making it one of the biggest in tech history and the biggest in Internet history.[73] Facebook valued its stock at $38 a share, pricing the company at $104 billion, the largest valuation to date for a newly public company. The IPO raised $16 billion, making it the third largest in U.S. history.[75][76] The shares began to be traded on May 18, and though the stock struggled to stay above the IPO price for most of the day, it set a new record for trading volume of an IPO, 460 million shares.The first day of trading was marred by numerous technical glitches that prevented orders from going through.[78] Only the aforementioned technical glitches and artificial support from underwriters prevented the stock price from falling below the IPO price on the first day of trading.

Later, it was revealed that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow.[80] 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 decline in the stock price.[81] Securities and Exchange Commission Chairman Mary Schapiro and Financial Industry Regulatory Authority (FINRA) Chairman Rick Ketchum called for a review of the circumstances surrounding its troubled initial public offering.

Facebooks' IPO is now under investigation and has been compared to pump and dump schemes.[78][80][82][83] In the meantime, a class-action lawsuit is in the works due to the trading glitches, which led to botched orders.[84][85] 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.

Additional lawsuits have been filed due to allegations that an underwriter for Morgan Stanley selectively revealed adjusted earnings estimates to preferred clients. The remaining underwriters (MS, JPM, GS) and Facebook's CEO and board are also facing litigation.[86] It is believed that adjustments to earnings estimates were communicated to the underwriters by a Facebook financial officer, who in turn 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.

Corporate affairs
Management
The ownership percentages of the company, As of 2012 are Mark Zuckerberg 28%,[89] Accel Partners 10%, Digital Sky Technologies 10%,[90] Dustin Moskovitz 6%, Eduardo Saverin 5%, Sean Parker 4%, Peter Thiel 3%, Greylock Partners and Meritech Capital Partners between 1 to 2% each, Microsoft 1.3%, Li Ka-shing 0.8%, the Interpublic Group less than 0.5%. A small group of current and former employees and celebrities own less than 1% each, including Matt Cohler, Jeff Rothschild, Adam D'Angelo, Chris Hughes, and Owen Van Natta, while Reid Hoffman and Mark Pincus have sizable holdings of the company. The remaining 30% or so are owned by employees, an undisclosed number of celebrities, and outside investors.[91] Adam D'Angelo, former chief technology officer and friend of Zuckerberg, resigned in May 2008. Reports claimed that he and Zuckerberg began quarreling, and that he was no longer interested in partial ownership of the company.

Key management personnel comprise Chris Cox (VP of Product), Sheryl Sandberg (COO), and Mark Zuckerberg (Chairman and CEO). As of April 2011, Facebook has over 2,000 employees, and offices in 15 countries.[93] Other managers include chief financial officer David Ebersman and public relations head Elliot Schrage.

Revenue
Most of Facebook's revenue comes from advertising.

Revenues
(estimated, in millions US$)
Year Revenue Growth
2006 $52[97] —
2007 $150[98] 188%
2008 $280[99] 87%
2009 $775[100] 177%
2010 $2,000[101] 158%
2011 $4,270[102] 114%

Facebook generally has a lower clickthrough rate (CTR) for advertisements than most major Web sites. According to BusinessWeek.com, banner advertisements on Facebook have generally received one-fifth the number of clicks compared to those on the Web as a whole, although specific comparisons can reveal a much larger disparity. For example, while Google users click on the first advertisement for search results an average of 8% of the time (80,000 clicks for every one million searches), Facebook's users click on advertisements an average of 0.04% of the time (400 clicks for every one million pages).

Sarah Smith, who was Facebook's Online Sales Operations Manager, reports that successful advertising campaigns on the site can have clickthrough rates as low as 0.05% to 0.04%, and that CTR for ads tend to fall within two weeks.[106] By comparison, the CTR for competing social network MySpace is about 0.1%, about 2.5 times better than Facebook's rate but still low compared to many other Web sites. The cause of Facebook's low CTR has been attributed to younger users enabling ad blocking software and being better at ignoring advertising messages, as well as the site being used more for the purpose of social communication as opposed to viewing content.

On pages for brands and products, however, some companies have reported CTR as high as 6.49% for Wall posts. A study found that, for video advertisements on Facebook, over 40% of users who viewed the videos viewed the entire video, while the industry average was 25% for in-banner video ads.

Mergers and acquisitions
Main article List of acquisitions by Facebook
On November 15, 2010, Facebook announced it had acquired the domain name fb.com from the American Farm Bureau Federation for an undisclosed amount. On January 11, 2011, the Farm Bureau disclosed $8.5 million in domain sales income, making the acquisition of FB.com one of the ten highest domain sales in history.

Offices
Entrance to Facebook headquarters complex in Menlo Park, California.

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

In early 2011, Facebook announced plans to move to its new headquarters, the former Sun Microsystems campus in Menlo Park, California.

All users outside of the US and Canada have a contract with Facebook's Irish subsidiary Facebook Ireland Limited. This allows Facebook to avoid US taxes for all users in Europe, Asia, Australia, Africa and South America. Facebook is making use of the Double Irish arrangement which allows it to pay just about 2-3% corporation tax on all international revenue.
In 2010, Facebook opened its fourth office, in Hyderabad and the first in Asia.

Facebook, which in 2010 had more than 750 million active users globally including over 23 million in India, announced that its Hyderabad centre would house online advertising and developer support teams and provide round-the-clock, multi-lingual support to the social networking site's users and advertisers globally. With this, Facebook joins other giants like Google, Microsoft, Oracle, Dell, IBM and Computer Associates that have already set up shop.In Hyderabad, it is registered as 'Facebook India Online Services Pvt Ltd'.

Though Facebook did not specify its India investment or hiring figures, it said recruitment had already begun for a director of operations and other key positions at Hyderabad, which would supplement its operations in California, Dublin in Ireland as well as at Austin, Texas.

A custom-built data center with substantially reduced (38% less) power consumption compared to existing Facebook data centers opened in April 2011 in Prineville, Oregon.
In April 2012 Facebook opened a second data center in Forest City, North Carolina.

On October 1, 2012, CEO Zuckerberg visited Moscow to stimulate social media innovation in Russia and to boost Facebook’s position in the Russian market. Russia's communications minister tweeted that Prime Minister Dmitry Medvedev urged the social media giant's founder to abandon plans to lure away Russian programmers and instead consider opening a research center in Moscow. Facebook has roughly 9 million users in Russia, while domestic clone VK has around 34 million.

Open source contributions
Facebook is both a consumer of and contributor to free and open source software.Facebook's contributions include HipHop for PHP,Fair scheduler in Apache Hadoop, Apache Hive, Apache Cassandra, and the Open Compute Project.

Facebook also contributes to other opensource projects such as Oracle's MySQL database engine.

Profile shown on Thefacebook in 2005

User profile
Users can create profiles with photos, lists of personal interests, contact information, and other personal information. Users can communicate with friends and other users through private or public messages and a chat feature. They can also create and join interest groups and like pages (called fan pages until April 19, 2010), some of which are maintained by organizations as a means of advertising.Facebook has been prompted to add a third gender, other, or intersex tab in the gender option which contains only male and female.Facebook refused and said that individuals can opt out of showing their sex on their profile.A 2012 Pew Internet and American Life study identified that between 20–30% of Facebook users are power users who frequently link, poke, post and tag themselves and others.The user page is set up in a minimal fashion with blue as the main color. This was done because Zuckerberg is red-green colorblind.

On June 13, 2009, Facebook introduced a Usernames feature, whereby pages can be linked with simpler URLs such as http://www.facebook.com facebook instead of http://www.facebook.comprofile.phpid=20531316728. Many new smartphones offer access to Facebook services through either their Web browsers or applications. An official Facebook application is available for the operating systems Android, iOS, and webOS. Nokia and Research In Motion both provide Facebook applications for their own mobile devices. More than 425 million active users access Facebook through mobile devices across 200 mobile operators in 60 countries.
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