Facemash
Facemash is the Facebook’s predecessor opened on October 28, 2003.
[1] 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:
[2][3][4]
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.
[5]
That the initial site mirrored people’s physical community—with their
real identities—represented the key aspects of what later became
Facebook.
[6]
"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..."
[7]
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 faced
expulsion from Harvard University for his wrong actions. However, at
the end, all the charges were dropped.
[8]
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.
[6]
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.
[9][10]
thefacebook.com
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."
[2] On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com.
[11] 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."
[12]
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."
[13]
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.
[14]
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.
[14] The three later filed a lawsuit against Zuckerberg, later settling.
[15]
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.
[16] 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.
[17] 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.
[18][19][20] Facebook was incorporated in the summer of 2004 and the entrepreneur
Sean Parker, who had been informally advising Zuckerberg, became the company's president.
[21] In June 2004, Facebook moved its base of operations to
Palo Alto, California.
[17] The company dropped ‘The’ from its name after purchasing the
domain name facebook.com in 2005 for $200,000.[23]
[22]
Facebook
Total active users[N 1]
| 02008-08-26 August 26, 2008 |
&10000000000000100000000100[23] |
&100000000000016650000001,665 |
178.38% |
| 02009-04-08 April 8, 2009 |
&10000000000000200000000200[24] |
&10000000000000225000000225 |
13.33% |
| 02009-09-15 September 15, 2009 |
&10000000000000300000000300[25] |
&10000000000000160000000160 |
9.38% |
| 02010-02-05 February 5, 2010 |
&10000000000000400000000400[26] |
&10000000000000143000000143 |
6.99% |
| 02010-07-21 July 21, 2010 |
&10000000000000500000000500[27] |
&10000000000000166000000166 |
4.52% |
| 02011-01-05 January 5, 2011 |
&10000000000000600000000600[28][N 3] |
&10000000000000168000000168 |
3.57% |
| 02011-05-30 May 30, 2011 |
&10000000000000700000000700[29] |
&10000000000000145000000145 |
3.45% |
| 02011-09-22 September 22, 2011 |
&10000000000000800000000800[30] |
&10000000000000115000000115 |
3.73% |
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 (around thirty campuses throughout the country
at the time), 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.
[31] At that time, high school networks required an invitation to join.
[32] Facebook later expanded membership eligibility to employees of several companies, including
Apple Inc. and
Microsoft.
[33]
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.
[34][35] In October 2008, Facebook announced that it was to set up its international headquarters in
Dublin, Ireland.
[36]
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,
[37]
and a set of Facebook Engineering Puzzles where users would solve
computational problems which gave them an opportunity to be hired by
facebook.
[38]
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.
[citation needed]
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
[39]
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.
[40]
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 received its first investment of US$500,000 in June 2004 from
PayPal co-founder
Peter Thiel, in exchange for 7% of the company.
[41] 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.
[41][42] A leaked
cash flow statement showed that during the 2005
fiscal year, Facebook had a net loss of $3.63 million.
[43]
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.
[44] Zuckerberg had already stated that he did not want to sell the company, and denied rumors to the contrary.
[45] 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.
[46]
In September 2006, serious talks between Facebook and
Yahoo! took place concerning acquisition of Facebook, with prices reaching as high as $1 billion.
[47][48]
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.
[49]
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."
[50]
In September 2007, Microsoft approached Facebook, proposing an
investment in return for a 5% stake in the company, offering an
estimated $300–500 million.
[51] That month, other companies, including
Google, expressed interest in buying a portion of Facebook.
[52]
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.
[53] 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.
[54] In November 2007, Hong Kong billionaire
Li Ka-shing invested $60 million in Facebook.
[55]
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.
[54]
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."
[56]
In August 2009, Facebook acquired
social media real-time
news aggregator FriendFeed,
[57] 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".
[58][59][60] In September 2009, Facebook claimed that it had turned cash flow positive for the first time.
[61] In February 2010, Facebook acquired Malaysian contact-importing startup Octazen Solutions.
[62] On April 2, 2010, Facebook announced acquisition of photo-sharing service called Divvyshot for an undisclosed amount.
[63] In June 2010, an
online marketplace for trading private company stock reflected a valuation of $11.5 billion.
[64]
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.
[65][66] 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.
[67] 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.
[68]
[edit] 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".
[69]
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.
[70]
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.
[71]
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.”
[72]
[edit] 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.
[73]
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 Zuckerberg in the Facebook IPO documents.
[74]
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.”
[75]
After the IPO, Zuckerberg will retain a 22% ownership share in Facebook and will own 57% of the voting shares.
[76]
[edit] 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.
[77] The issue rose in 2008, around the Olympics time, when there was tension between
China and
Tibet.
[78]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.
[79]
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.
[80]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.
[81] 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.
[82]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."
[83] 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.”
[84] In
Facebook,
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.”
[85] With
Facebook willing to take any challenges from countries.
