History of facebook
Businesses, too, have found their place from industry giants to the quaint cafe in a tiny town of a few hundred people.
So how did one young US student go from coding in his dorm room to the head of one of the most important and influential tech firms in history?
Zuckerberg starts out
Mark Zuckerberg took the first steps of his path at an early age. Clearly understanding the importance of coding, Zuckerberg’s father Edward taught him Atari BASIC computer programming. It didn’t take long for his skills to become apparent. When he was 11, his parents hired a software developer named David Newman to tutor him. Newman to this day calls Zuckerberg a “prodigy”.
Within a couple of years, Zuckerberg created an incredibly practical programme: ZuckNet. His father ran a dentists out of the house and wanted a simple way for the receptionist to contact him without shouting through their home. ZuckNet, which worked like an internal instant messaging system, did just that.
While attending Phillips Exeter Academy, an elite boarding school, his drive to create did not abate. He attracted interest from AOL and Microsoft. The wanted to buy Synapse, a piece of software that learned a user’s music taste through AI and listening habits he created with a friend, and give him a job.
Ultimately, he turned it down and set his sites on Harvard. It’s here where the origins of Facebook can be found. It’s a decision he unlikely regrets now.
Harvard and Facemash
Having turned down two of the biggest tech companies in the world, Zuckerberg headed off to Harvard in 2002. Clearly he had bigger plans. He chose to major in psychology, but took plenty of computer science classes along with it. At first the psychology choice seems strange. Why not major in programming or something similar?
But when you think of Facebook’s nature, the supposed ‘addictive’ nature of the likes, comments, and pokes, the psychology part becomes clearer. Facebook from the off pulls you in to share personal details and seek out interaction from other people. Being able to design something like this must involve some knowledge of the human mind.
Zukerberg attracts his first big controversy in October, 2003. He creates and published Facemash, a website that lets Harvard students judge the attractiveness of each other to create rankings (similar to the Hot or Not site that launched in 2000). As he didn’t actually get permission to use student photos, unsurprisingly many were not happy with his work.
Within a few hours the site had seen 22k photo views, but within a few days it was shut down. He was hauled in front of the Harvard Administration Board. With the risk of expulsion on the table, the board finally decided to let him stay. After a public apology he moved on from his first brush with authority and set his sights on his next project.
It wasn’t long until we saw the first iteration of a now near ubiquitous company. February, 2004 saw Thefacebook launch. With a slightly different name, the platform was familiar. It had a profile where you could upload a photo, share your interests, and connect with other people. It also offered a network visualization of your connections.
Initially this was only opened to people with a Harvard email address and within the first month 50% of the college’s student’s had signed up. But there was a big problem Zuckerberg had to deal with from the off. He was being sued.
Zuckerberg ad previously worked on a similar project with fellow students Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra. He eventually quit to do this one thing, Thefacebook. But this ex-collaborators say he stole their concept and ideas and they wanted recompense.
They eventually came to a settlement in 2008, with each of the trio receiving 1.2m shares in the Facebook company. By the IPO, these were worth $300m, but more on the IPO later.
Thefacebook was an instant hit and interest grew and grew and grew. By the end of 2004, membership was open to nearly all universities in the US and Canada and people were clamouring to sign up.
June of that year also saw Zuckerberg move the company’s operations to Palo Alto, California and secured some important investment. Co-founder of PayPal, Peter Thiel, joined the board and brought with him $500,000.
In May 2005 TheFacebook received more money. This time investments of $12.7m from Accel and $1m from the personal fortune of venture capitalist Jim Breyer. People were really paying attention now.
In August the ‘the’ was dropped and the company officially became Facebook (the facebook.com domain cost $200,000). The following month high school students are admitted, along with employees of Microsoft and Apple. The company was now ready to move beyond its student base.
Then in November Zuckerberg took an important decisions about his own life. Having taken the semester off from Harvard, he announced he was leaving entirely, returning briefly to hire some new employees. After significant investment and a growing membership, Zuckerberg was ready to fully dedicate himself to running his company, as a CEO rather than a programmer.
You heard of this thing called Facebook?
With the Zuck at the helm full-time, Facebook continued its expansion plans. In December Australian and New Zealand universities were included, along with high schools from Mexico, the UK, and Ireland. That meant there were now 2,500 colleges and 25,000 high schools with access to Facebook.
It wasn’t until September 2006 when the platform became open for everyone (well, anyone over 13 with a valid email address). Facebook had now gone fully global. We also started to see the rate of membership growth:
December 2006: 12m
April 2007: 20m
July 2007: 30m
October 2007: 50m
In May 2007, Facebook open their Marketplace, which lets users post classifieds to sell products and services. It also saw the launch of the Facebook Application Developer platform, opening the gates for developers to create their own applications and games that integrated with Facebook.
The platform was also looking beyond personal profiles to how businesses could use the site. By the end of 2007 over 100,000 companies had signed up, with Facebook launching Pages for Businesses to support this. Already they’re making plans to build on existing ad revenue to make advertising on the platform accessible to even the smallest of businesses.
Then in 2008 we see a huge release from Facebook. April, 2008 saw Facebook Chat roll out, allow us to more instantly annoy our friends and family. Essentially, the concept is no different to ZuckNet. We also see the People You May Know, Facebook Wall, and Facebook Connect released in the same year.
Meanwhile the user count continues to grow:
August, 2008: 100m
January, 2009: 150m
February 2009: 175m
April, 2009: 200m
July, 2009: 250m
September, 2009: 300m
We also saw one of the big Facebook games appear. Farmville was released in June, 2009 and, despite being a rip off of a game called Farm Town, became a huge success. By August it had 10m daily active users. So, so much virtual corn.
The world’s greatest
Then, finally, in December, 2009, Facebook hits a major milestone. With 350m registered users and 132m unique monthly users, it becomes the most popular social platform in the world. Of course, the company wasn’t planning to leave it at that.
The following year saw lots more tweaking and changes, such as the ability to like comments and improvements to photo tagging. July saw the number of registered users hit 500m, while the end of the year saw a big valuation of the company.
In November, 2010 Facebook was valued at a massive $41bn. Meanwhile it became the 3rd largest web company in the US, sitting behind Google and Amazon. All of this being achieved in under five years with no sign of progress slowing.
Another huge milestone was reached the following year. June, 2011 saw Facebook reach 1 trillion page views, according to a study by DoubleClick. And then, for the year overall, Nielsen found the site was the 2nd most visited in the United States.
August also saw the release of Facebook Messenger as a standalone app. This came after the company acquired Beluga, a group messaging service, back in March.
Facebook had now become a huge name, a globally used website, and at the head of the social media revolution. Not too shabby from someone who was still in school just a few years prior.
Buy, buy, buy and sell, sell, sell
Now we reach 2012, which is probably one of the most important years in Facebook’s (admittedly short) history.
In April we see Facebook make a major acquisition: Instagram. Spending $1bn, we get an idea of the kind of resources the platform now has at its disposal. This was just a month before the years big event. The IPO.
Come May and Zuckerberg was finally ready to take Facebook public. The company was valued at $104bn, $38 a share (congrats Narendra and the Winklevoss Twins). When all was said and done, the IPO raised a huge $161m, but there was trouble ahead.
The IPO was dogged with accusations of improper behaviour by underwriters and technical issues, while Facebook lost a quarter of its stock value in the process. All by the end of the same month. The IPO was declared a “fiasco” by the Wall Street Journal. By June 6 investors had collectively lost $40bn.
Over 40 lawsuits relating to the IPO were then filed. It was suggested that the underwriters (Morgan Stanley, JP Morgan, and Goldman Sachs) maybe have acted inappropriately. There were reports they they secretly cut revenue estimates mid-IPO, while there have been accusations information was fed to the underwriters from Facebook that led them to cash out.
On top of that there were problems with trading glitches and botched orders, with Facebook also being accused of running their IPO like a pump and dump scheme.
Overall, not the smoothest of IPOs. But, of course. Facebook carried on nonetheless. By October the platform saw its 1 billionth registered user.