Facebook is a social networking website launched on February 4, 2004. The free-access website is privately owned and operated by Facebook, Inc. 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 profile to notify friends about themselves. The website’s name refers to the paper facebooks depicting members of a campus community that some American colleges and preparatory schools give to incoming students, faculty, and staff as a way to get to know other people on campus.
Mark Zuckerberg founded Facebook while still a student at Harvard University.  Website membership was initially limited to Harvard students, but was expanded to other colleges in the Ivy League. 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 100 million active users worldwide.
Facebook has met with some controversy over the past few years. It has been blocked intermittently in several countries including Syria  and Iran.  It has also been banned at many places of work to increase productivity.  Privacy has also been an issue, and it has been compromised several times. It 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.
Mark Zuckerberg founded “The Facebook”, originally located at thefacebook.com, in February 2004 while attending Harvard University as a sophomore. The company dropped The from its name after purchasing the domain name facebook.com in 2005 for $200,000. Membership was initially restricted to students of Harvard College, and within the first month, more than half the undergraduate population at Harvard were registered on the service. Dustin Moskovitz 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 schools and gradually most universities in Canada and the United States. In June 2004, Facebook moved its base of operations to Palo Alto, California.
Facebook launched a high school version in September 2005; Zuckerberg called it the next logical step. 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 to everyone with a valid e-mail address, aside from people under the age of 13, on September 26, 2006.
BusinessWeek has confirmed that Facebook, beginning this fall, will allow its employees to sell stock at no more than a $3.75 billion valuation.
Facebook received its first investment of US$500,000 in June 2004 from PayPal co-founder Peter Thiel. 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 cash flow statement was leaked, showing that during the 2005 fiscal year, Facebook had a net loss of $3.63 million. Microsoft approached Facebook in September 2007, proposing an investment in return for a 5% stake in the company. Microsoft would pay an estimated $300–500 million for the share. Microsoft announced on October 24, 2007 that it purchased a 1.6% share of Facebook for $246 million. On November 30, 2007, Hong Kong billionaire Li Ka-shing invested $60 million in Facebook.
BusinessWeek reported on March 28, 2006 that a potential acquisition of the website 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. 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 said he did not want to sell the company and denied rumors to the contrary. In late September, serious talks between Facebook and Yahoo! took place concerning acquisition of the social network, 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. Other companies, including Google, expressed interest in September 2007 to buy a portion of Facebook. Amid the rumors, Zuckerberg claimed that selling Facebook was unlikely because he wanted to keep it independent, stating on July 17, 2007, “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.”
On the homepage for Facebook, a login form is shown on the left, and a registration form is shown on the right.
Facebook users can choose to join one or more networks, organized by city, workplace, school, and region. These networks help users connect with members of the same network. Users can also connect with friends, giving them access to their friends’ profiles.
The website is free to users, but generates revenue from advertising, including banner ads. Users can create profiles including photos and lists of personal interests, exchange private or public messages, and join groups of friends. The viewing of detailed profile data is restricted to users from the same network or confirmed friends only when the appropriate Privacy settings have been altered. Without altering the Privacy settings a Facebook profile is viewable by anybody on Facebook.
Microsoft is Facebook’s exclusive partner for serving banner advertising, 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! when compared with other web companies.
The media often compares Facebook to MySpace, but one significant difference between the two websites is the level of customization. MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook only allows plain text.
Facebook has a number of features for users to interact with. They include the Wall, a space on every user’s profile page that allows friends to post messages for the user to see, Pokes, which allows users to send a virtual “poke” to each other (a notification that tells a user that they have been poked), Photos, where users can upload albums and photos, and Status, which allows users to inform their friends of their whereabouts and actions. A user’s Wall is visible to anyone who is able to see that user’s profile, which depends on their 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.
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 related to the user’s friends. 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). 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 different types of activities, including profile changes, Wall posts, and newly added friends.
One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos. 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. However, users are limited to 60 photos per album. 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.
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. During the week of April 7, 2008, Facebook released a Comet-based instant messaging application called “Chat” to several networks, 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. On May 14, 2007, Facebook launched Marketplace, which lets users post free classified ads. 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.
On July 20, 2008, Facebook introduced 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. The company said the changes would become visible to all users in the “coming days.” On August 3, 2008, the format was finally changed to the new look.
Facebook launched the Facebook Platform on May 24, 2007, providing a framework for software developers to create applications that interact with core Facebook features. 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, 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.
Applications that have been created on the Platform include chess and Scrabble, which both allow users to play games with their friends. 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.
By November 3, 2007, seven thousand applications had been developed on the Facebook Platform, with another hundred created everyday. By the second annual f8 developers conference on July 23, 2008, the number of applications had grown to 33,000, and the number of registered developers had exceeded 400,000.
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. 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.
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