Facebook

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Facebook, Inc.
Facebook.svg
Facebookhomedecember2012.png
Screenshot of Facebook main page on
August 1, 2013
TypePublic
Traded asNASDAQFB
Foundation dateCambridge, Massachusetts, U.S. (February 4, 2004 (February 4, 2004))
HeadquartersMenlo Park, California, U.S.
Area servedUnited States (2004–05)
Worldwide (2005–present)
Founder(s)
Key peopleMark Zuckerberg
(Chairman and CEO)
Sheryl Sandberg
(COO)
IndustryInternet
RevenueIncrease $5.1 billion (2012)[1]
Operating incomeDecrease US$ 538 million (2012)[2]
Net incomeIncrease US$ 053 million (2012)[2]
Total assetsIncrease US$ 15.10 billion (2012)[2]
Total equityIncrease US$ 11.75 billion (2012)[2]
Employees5,794 (September 2013)[3]
SubsidiariesInstagram
Websitefacebook.com
Written inC++ and PHP[4]
Alexa rankSteady 2 (December 2013)[5]
Type of siteSocial networking service
RegistrationRequired
Users1.19 billion (active September 2013)[6]
Available inMultilingual (70)
LaunchedFebruary 4, 2004 (2004-02-04)
Current statusActive
 
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Facebook, Inc.
Facebook.svg
Facebookhomedecember2012.png
Screenshot of Facebook main page on
August 1, 2013
TypePublic
Traded asNASDAQFB
Foundation dateCambridge, Massachusetts, U.S. (February 4, 2004 (February 4, 2004))
HeadquartersMenlo Park, California, U.S.
Area servedUnited States (2004–05)
Worldwide (2005–present)
Founder(s)
Key peopleMark Zuckerberg
(Chairman and CEO)
Sheryl Sandberg
(COO)
IndustryInternet
RevenueIncrease $5.1 billion (2012)[1]
Operating incomeDecrease US$ 538 million (2012)[2]
Net incomeIncrease US$ 053 million (2012)[2]
Total assetsIncrease US$ 15.10 billion (2012)[2]
Total equityIncrease US$ 11.75 billion (2012)[2]
Employees5,794 (September 2013)[3]
SubsidiariesInstagram
Websitefacebook.com
Written inC++ and PHP[4]
Alexa rankSteady 2 (December 2013)[5]
Type of siteSocial networking service
RegistrationRequired
Users1.19 billion (active September 2013)[6]
Available inMultilingual (70)
LaunchedFebruary 4, 2004 (2004-02-04)
Current statusActive
Facebook
History
Timeline
Statistics
Acquisitions
Criticism
Features

Facebook is an online social networking service. Its name comes from a colloquialism for the directory given to American university students.[7] Facebook 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.[8] The founders had initially limited the website's membership to Harvard students, but later expanded it to colleges in the Boston area, the Ivy League, and Stanford University. It gradually added support for students at various other universities before it opened to high-school students, and eventually to anyone aged 13 and over. Facebook now allows anyone who claims to be at least 13 years old to become a registered user of the website.[9]

Users must register before using the site, after which they may create a personal profile, add other users as friends, exchange messages, and receive 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,[10] of which 8.7% are fake.[11] Facebook (as of 2012) has about 180 petabytes of data per year and grows by over half a petabyte every 24 hours.[12]

In May 2005, Accel partners invested $12.7 million in Facebook, and Jim Breyer[13] added $1 million of his own money. A January 2009 Compete.com study ranked Facebook the most used social networking service by worldwide monthly active users.[14] 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?"[15] Facebook eventually filed for an initial public offering on February 1, 2012; it is headquartered in Menlo Park, California.[2] Facebook Inc. began selling stock to the public and trading on the NASDAQ on May 18, 2012.[16] Based on its 2012 income of US$5.1 billion, Facebook joined the Fortune 500 list for the first time on the list published in May 2013, being placed at position 462.[17]

History

Pre-IPO

Zuckerberg wrote a program called Facemash 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"[18][19]

To accomplish this, Zuckerberg hacked into protected areas of Harvard's computer network and copied private dormitory ID images. Harvard did not have a student "Facebook" (a directory with photos and basic information) at the time, although 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.[18][20]

The site was quickly forwarded to several campus group list-servers,[clarification needed] 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.[21] 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, and each image was featured with a corresponding comments section.[20] He shared the site with his classmates and people started sharing notes.

The following semester, Zuckerberg began writing code for a new website in January 2004. He said he was inspired by an editorial about the Facemash incident in The Harvard Crimson.[22] On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com.[23]

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. They claimed he was instead using their ideas to build a competing product.[24] The three complained to The Harvard Crimson and the newspaper began an investigation. They later filed a lawsuit against Zuckerberg, subsequently settling in 2008[25] for 1.2m in shares (worth $300m at Facebook's IPO).[26]

Membership was initially restricted to students of Harvard College; within the first month, more than half the undergraduates at Harvard were registered on the service.[27] Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic artist), and Chris Hughes joined Zuckerberg to help promote the website. In March 2004, Facebook expanded to the universities of Stanford, Columbia, and Yale.[28] It later opened to all Ivy League colleges, Boston University, New York University, the MIT, and gradually most universities in Canada and the United States.[29][30]

In mid-2004, entrepreneur Sean Parker (an informal advisor to Zuckerberg) became the company's president.[31] In June 2004, Facebook moved its operations base to Palo Alto, California.[28] It received its first investment later that month from PayPal co-founder Peter Thiel.[32] In 2005, the company dropped the from its name after purchasing the domain name facebook.com for $200,000.[33]

A high-school version of the site was launched in September 2005, which Zuckerberg called the next logical step.[34] (At the time, high-school networks required an invitation to join.)[35] Facebook expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.[36] On September 26, 2006, Facebook was opened to everyone at least 13 years old with a valid email address.[37][38]

In late 2007, Facebook had 100,000 business pages (pages which allowed companies to promote themselves and attract customers). These started as group pages, but a new concept called company pages was planned.[when?][39]

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.[40] Microsoft's purchase included rights to place international adverts on the social networking site.[41] In October 2008, Facebook announced that it would set up its international headquarters in Dublin, Ireland.[42] In September 2009, Facebook said that it had turned cash-flow positive for the first time.[43] In November 2010, based on SecondMarket Inc. (an exchange for privately held companies' shares), Facebook's value was $41 billion; it slightly surpassed eBay's became the third largest American web company after Google and Amazon.com.[44]

Traffic to Facebook increased steadily after 2009. More people visited Facebook than Google for the week ending March 13, 2010.[45]

In March 2011, it was reported that Facebook takes approximately 20,000 profiles offline every day for infractions including spam, inappropriate content and underage use, as part of its efforts to boost cyber security.[46]

In early 2011, Facebook announced plans to move its headquarters to the former Sun Microsystems campus in Menlo Park, California.[47][48]

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 tracked by DoubleClick.[49]

According to the Nielsen Media Research study, released in December 2011, Facebook is the second most accessed website in the US (behind Google).[50]

In March 2012, Facebook announced App Center, an store selling applications that operate via the site. The store will be available to iPhone, Android and mobile web users.[51]

Facebook held an initial public offering on May 17, 2012, negotiating a share price of $38 apiece. The company was valued at at $104 billion, the largest valuation to date for a newly listed public company.[52]

Initial public offering

Facebook filed their S1 document with the Securities and Exchange Commission on February 1, 2012. The company applied for a US$5 billion initial public offering (IPO); one of the biggest in the history of technology and the biggest in Internet history.[53] Facebook valued its stock at $38 a share which priced the company at $104 billion – the largest valuation to date for a new public company.[54][55] The IPO raised $16 billion, making it the third largest in U.S. history.[56][57] The shares began trading on May 18; the stock struggled to stay above the IPO price for most of the day, but set a record for the trading volume of an IPO (460 million shares).[58] The first day of trading was marred by technical glitches that prevented orders from going through;[59] only the technical problems and artificial support from underwriters prevented the stock price from falling below the IPO price on the day.[60]

It was revealed later[when?] that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) cut their earnings forecasts for the company in the middle of the IPO roadshow.[61] 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 stock price's decline.[62] Securities and Exchange Commission Chairman Mary Schapiro and Financial Industry Regulatory Authority (FINRA) Chairman Rick Ketchum called for a review of the circumstances surrounding the IPO.[63]

Facebooks' IPO is now under investigation and has been compared to pump and dump schemes.[59][61][63][64] A class-action lawsuit was filed in May 2012 due to the trading glitches, which led to botched orders.[65][66] Apparently,[according to whom?] 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.

Lawsuits have been filed alleging that an underwriter for Morgan Stanley selectively revealed adjusted earnings estimates to preferred clients.[67] The other underwriters (MS, JPM, GS) and Facebook's CEO and board are also facing litigation.[68] It is believed that adjustments to earnings estimates were communicated to the underwriters by a Facebook financial officer, who used the information to cash out on their positions while leaving the general public with overpriced shares.[69]

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."[70]

After IPO

In July 2012, Facebook added a gay marriage icon to its timeline feature.[71] On August 23, 2012, Facebook released an update to its iOS app (version 5.0), which changed how data was collected and displayed to make it faster. On January 15, 2013, Facebook announced Graph Search, which provides users with a "precise answer" rather than a link to an answer by leveraging the data present on its site.[72] Facebook emphasized that the feature would be "privacy-aware," returning only results from content already shared with the user.[73] The company is the subject of a lawsuit by Rembrandt Social Media for patents involving the "Like" button.[74] On April 3, 2013, Facebook unveiled Home, a user-interface layer for Android devices offering greater integration with the site. HTC announced the HTC First, a smartphone with Home pre-loaded.[75] On April 15, 2013, Facebook announced an alliance across 19 states with the National Association of Attorneys General to provide teenagers and parents with information on tools to manage social networking profiles.[76] On April 19, 2013, Facebook officially modified its logo to remove the faint blue line at the bottom of the "F" icon. The letter F moved closer to the edge of the box.[77]

Following a campaign by 100 advocacy groups, Facebook agreed to update its policy on hate speech. The campaign highlighted content promoting domestic and sexual violence against women, and used over 57,000 tweets and more than 4,900 emails that caused withdrawal of advertising from the site by 15 companies, including Nissan UK, House of Burlesque and Nationwide UK. The social media website initially responded by stating that "while it may be vulgar and offensive, distasteful content on its own does not violate our policies".[78] It decided to take action on May 29, 2013 after it "become clear that our systems to identify and remove hate speech have failed to work as effectively as we would like, particularly around issues of gender-based hate."[79]

On June 12, 2013, Facebook announced on its newsroom that it was introducing clickable hashtags to help users follow trending discussions or search what others are talking about on a topic.[80] A July 2013 Wall Street Journal article identified the Facebook IPO as the cause of a change in the U.S.' national economic statistics, as the company home (San Mateo County, California) became the top wage-earning county in the country after the fourth quarter of 2012. The Bureau of Labor Statistics reported that the average weekly wage in the county was US$3,240, 107% higher than the previous year. It noted the wages were "the equivalent of $168,000 a year, and more than 50% higher than the next highest county, New York County (better known as Manhattan), which came in at $2,107 a week, or roughly $110,000 a year."[81]

Russian internet firm Mail.Ru sold its Facebook shares for US$525 million on September 5, 2013, following its initial US$200 million investment in 2009. Partly owned by Russia's richest man Alisher Usmanovhe, the firm owned a total of 14.2 million remaining shares prior to the sale.[82] In the same month, the Chinese government announced that it will lift the ban on Facebook in the Shanghai Free Trade Zone "to welcome foreign companies to invest and to let foreigners live and work happily in the free-trade zone." Facebook has been blocked in China since 2009.[83]

Facebook is part of The Alliance for Affordable Internet (A4AI) (which was launched in October 2013). The A4AI is a coalition of public and private organisations that includes Google, Intel and Microsoft. Led by Sir Tim Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the developing world, where only 31% of people are online. Google will help to decrease Internet access prices so that they fall below the UN Broadband Commission's worldwide target of 5% of monthly income.[84]

A Reuters report, published on December 11, 2013, stated that Standard & Poor's announced the placement of Facebook onto its S&P 500 index "after the close of trading on December 20."[85]

Corporate affairs

Management

The ownership percentages of the company, as of 2012, are: Mark Zuckerberg: 28%,[86] Accel Partners: 10%, Digital Sky Technologies: 10%,[87] 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.[88] 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.[89]

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.[90] Other managers include chief financial officer David Ebersman and public relations head Elliot Schrage.[91]

Facebook was named the 5th best company to work for in 2014 by company-review site Glassdoor as part of its sixth annual Employees' Choice Awards. The website stated that 93% of Facebook employees would recommend the company to a friend.[92]

Revenue

Most of Facebook's revenue comes from advertising.[93][94]

Revenues
(estimated, in millions US$)
YearRevenueGrowth
2006$52[95]
2007$150[96]188%
2008$280[97]87%
2009$775[98]177%
2010$2,000[99]158%
2011$4,270[100]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,[101] 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),[102] Facebook's users click on advertisements an average of 0.04% of the time (400 clicks for every one million pages).[103]

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.[104] 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.[105]

On pages for brands and products, however, some companies have reported CTR as high as 6.49% for Wall posts.[106] 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.[107]

Mergers and acquisitions

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.[108]

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.[109]

In 2010, Facebook opened its fourth office, in Hyderabad[110][111][112] and the first in Asia.[113]

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.[114] With this, Facebook joins other giants like Google, Microsoft, Oracle, Dell, IBM and Computer Associates that have already set up shop.[115] In Hyderabad, it is registered as 'Facebook India Online Services Pvt Ltd'.[116][117][118]

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,[119] 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.[120] In April 2012, Facebook opened a second data center in Forest City, North Carolina, US.[121]

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.[122] 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 analogue VK has around 34 million.[123]

The functioning of a woodwork facility on the Menlo Park campus was announced at the end of August 2013. The facility, opened in June 2013, provides equipment, safety courses and woodwork learning course, while employees are required to purchase materials at the in-house store. A Facebook spokesperson explained that the intention of the facility is to encourage employees to think in an innovative manner due to the different environment, and also serves as an attractive perk for prospective employees.[124]

Open source contributions

Facebook is both a consumer of and contributor to free and open source software.[125] Facebook's contributions include: HipHop for PHP,[126] Fair scheduler in Apache Hadoop,[127] Apache Hive, Apache Cassandra,[128] and the Open Compute Project.[129]

Facebook also contributes to other opensource projects such as Oracle's MySQL database engine.[130][131]

Website

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.[132] Facebook has been prompted to add a "third gender", "other", or "intersex" tab in the gender option which contains only male and female.[133] Facebook refused and said that individuals can "opt out of showing their sex on their profile".[134] 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.[135] 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.[136]

On June 13, 2009, Facebook introduced a "Usernames" feature, whereby pages can be linked with simpler URLs such as https://www.facebook.com/facebook instead of https://www.facebook.com/profile.php?id=20531316728.[137] 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.[138]

Comparison with Myspace

The media often compares Facebook to Myspace, but one significant difference between the two Web sites is the level of customization.[139] Another difference is Facebook's requirement that users give their true identity, a demand that MySpace does not make.[140] MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook allows only plain text.[141] 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;[142] Pokes, which allows users to send a virtual "poke" to each other (a notification then tells a user that they have been poked);[143] Photos, where users can upload albums and photos;[144] and Status, which allows users to inform their friends of their whereabouts and actions.[145] Depending on privacy settings, anyone who can see a user's profile can also view that user's Wall. In July 2007, Facebook began allowing users to post attachments to the Wall, whereas the Wall was previously limited to textual content only.[142]

News Feed

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.[146] This enabled spammers and other users to manipulate these features by creating illegitimate events or posting fake birthdays to attract attention to their profile or cause.[147] Initially, the News Feed caused dissatisfaction among Facebook users; some complained it was too cluttered and full of undesired information, others were concerned that it made it too easy for others to track individual activities (such as relationship status changes, events, and conversations with other users).[148]

In response, 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 user-set categories of friends from seeing updates about certain types of activities, including profile changes, Wall posts, and newly added friends.[149]

On February 23, 2010, Facebook was granted a patent[150] on certain aspects of its News Feed. The patent covers News Feeds in which links are provided so that one user can participate in the same activity of another user.[151] The patent may encourage Facebook to pursue action against websites that violate its patent, which may potentially include websites such as Twitter.[152]

One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos.[153] 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. During the first years, Facebook users were limited to 60 photos per album. As of May 2009, this limit has been increased to 200 photos per album.[154][155][156][157]

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 application 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.[158]

On June 7, 2012, Facebook launched its App Center to its users. It will help the users in finding games and other applications with ease.[159] Since the launch of the App Center, Facebook has seen 150M monthly users with 2.4 times the installation of apps.[160]

The sorting and display of stories in a user's News Feed is governed by the algorithm EdgeRank.[161]

Facebook Notes

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.[37] During the week of April 7, 2008, Facebook released a Comet-based[162] instant messaging application called "Chat" to several networks,[163] 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.[164][165] On May 14, 2007, Facebook launched Marketplace, which lets users post free classified ads.[166] 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 seen only by users in the same network as that user, whereas listings posted on Craigslist can be seen by anyone.[167]

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.[168] After initially giving users a choice to switch, Facebook began migrating all users to the new version starting in September 2008.[169] On December 11, 2008, it was announced that Facebook was testing a simpler signup process.[170]

Messaging

A new Messaging platform, codenamed "Project Titan", was launched on November 15, 2010. Described as a "Gmail killer" by some publications, the system allows users to directly communicate with each other via Facebook using several different methods (including a special email address, text messaging, or through the Facebook website or mobile app)—no matter what method is used to deliver a message, they are contained within single threads in a unified inbox. As with other Facebook features, users can adjust from whom they can receive messages from—including just friends, friends of friends, or from anyone.[171][172]

Aside from the Facebook website, Messages can also be accessed through the site's mobile apps, or a dedicated Facebook Messenger app.[173]

Voice calls

Since April 2011, Facebook users have had the ability to make live voice calls via Facebook Chat, allowing users to chat with others from all over the world. This feature, which is provided free through T-Mobile's new Bobsled service, lets the user add voice to the current Facebook Chat as well as leave voice messages on Facebook.[174]

Video calling

On July 6, 2011, Facebook launched its video calling services using Skype as its technology partner. It allows one-to-one calling using a Skype Rest API.

Following

On September 14, 2011, Facebook added the ability for users to provide a "Subscribe" button on their page, which allows users to subscribe to public postings by the user without needing to add them as a friend.[175] In conjunction, Facebook also introduced a system in February 2012 to verify the identity of certain accounts. Unlike a similar system used by Twitter, verified accounts do not display a special verification badge, but are given a higher priority in a user's "Subscription Suggestions".[176]

In December 2012, Facebook announced that due to user confusion surrounding its function, the Subscribe button would be re-labeled as a "Follow" button—making it more similar to other social networks with similar functions.[177]

Privacy

To allay concerns about privacy, Facebook enables users to choose their own privacy settings and choose who can see specific parts of their profile.[178] The website is free to users, and generates revenue from advertising, such as banner ads.[179] Facebook requires a user's name and profile picture (if applicable) to be accessible by everyone. Users can control who sees other information they have shared, as well as who can find them in searches, through their privacy settings.[180]

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!.[181] In 2010, the security team began expanding its efforts to reduce the risks to users' privacy,[182] but privacy concerns remain.[183] On November 6, 2007, Facebook launched Facebook Beacon, which was an ultimately failed attempt to advertise to friends of users using the knowledge of what purchases friends made. As of March 2012, Facebook's usage of its user data is under close scrutiny.[184]

Since 2010 the National Security Agency has been taking Facebook profile information from users to discover who their allies, friends, and colleagues are.[185]

FTC settlement

On November 29, 2011, Facebook agreed to settle US Federal Trade Commission charges that it deceived consumers by failing to keep privacy promises.[186]

Technical aspects

Facebook is built in PHP which is compiled with HipHop for PHP, a 'source code transformer' built by Facebook engineers that turns PHP into C++.[187] The deployment of HipHop reportedly reduced average CPU consumption on Facebook servers by 50%.[188]

Facebook is developed as one monolithic application. According to an interview in 2012 with Chuck Rossi, a build engineer at Facebook, Facebook compiles into a 1.5 GB binary blob which is then distributed to the servers using a custom BitTorrent-based release system. Rossi stated that it takes approximately 15 minutes to build and 15 minutes to release to the servers. The build and release process is zero downtime and new changes to Facebook are rolled out daily.[188]

Facebook used a combination platform based on HBase to store data across distributed machines. Using a tailing architecture, new events are stored in log files, and the logs are tailed. The system rolls these events up and writes them into storage. The User Interface then pulls the data out and displays it to users. Facebook handles requests as AJAX behavior. These requests are written to a log file using Scribe (developed by Facebook).[189]

Data is read from these log files using Ptail, an internally built tool to aggregate data from multiple Scribe stores. It tails the log files and pulls data out (thus the name). Ptail data is separated out into three streams so they can eventually be sent to their own clusters in different data centers (Plugin impression, News feed impressions, Actions (plugin + news feed)). Puma is used to manage periods of high data flow (Input/Output or IO). Data is processed in batches to lessen the amount of times needed to read and write under high demand periods (A hot article will generate a lot of impressions and news feed impressions which will cause huge data skews). Batches are taken every 1.5 seconds, limited by memory used when creating a hash table.[189]

After this, data is output in PHP format (compiled with HipHop for PHP). The backend is written in Java and Thrift is used as the messaging format so PHP programs can query Java services. Caching solutions are used to make the web pages display more quickly. The more and longer data is cached the less realtime it is. The data is then sent to MapReduce servers so it can be queried via Hive. This also serves as a backup plan as the data can be recovered from Hive. Raw logs are removed after a period of time.[189]

Like button

The like button is a social networking feature, allowing users to express their appreciation of content such as status updates, comments, photos, and advertisements. It is also a social plug-in of the Facebook Platform – launched on April 21, 2010[190][191] – that enables participating Internet websites to display a similar like button.

Continuously liking a friend's content will cause a flooding of notifications on his/her part and Facebook will display a message to the liker stating that (s)he must slow down—(s)he must wait for five minutes to continue liking.[citation needed]

Following the termination by the sheriff of Hampton, Virginia, US of employees who liked the Facebook page of an adversary, a federal appeals court in Virginia handed down a decision that the US Constitution protects the rights of US citizens to like any Facebook page of their choosing. US Circuit Judge William Traxler likened the practice to displaying a "political sign in one’s front yard."[192]

Lawsuit

Patents relating to the "Like" button and other social features held by deceased Dutch programmer Joannes Jozef Everardus van Der Meer are subject of a lawsuit brought against Facebook by Rembrandt Social Media.[74][193] Rembrandt is represented by the Fish & Richardson Law Firm that stated "We believe Rembrandt's patents represent an important foundation of social media as we know it, and we expect a judge and jury to reach the same conclusion based on the evidence." As of April 2, 2013, further information about the case is unknown in the public sphere.[194]

Reception

According to comScore, Facebook is the leading social networking site based on monthly unique visitors, having overtaken main competitor MySpace in April 2008.[195] ComScore reports that Facebook attracted 130 million unique visitors in May 2010, an increase of 8.6 million people.[196] According to Alexa, the website's ranking among all websites increased from 60th to 7th in worldwide traffic, from September 2006 to September 2007, and is currently 2nd.[197] Quantcast ranks the website 2nd in the U.S. in traffic,[198] and Compete.com ranks it 2nd in the U.S.[199] The website is the most popular for uploading photos, with 50 billion uploaded cumulatively.[200] In 2010, Sophos's "Security Threat Report 2010" polled over 500 firms, 60% of which responded that they believed that Facebook was the social network that posed the biggest threat to security, well ahead of MySpace, Twitter, and LinkedIn.[182]

Facebook is the most popular social networking site in several English-speaking countries, including Canada,[201] the United Kingdom,[202] and the United States.[203][204][205][206] In regional Internet markets, Facebook penetration is highest in North America (69 percent), followed by Middle East-Africa (67 percent), Latin America (58 percent), Europe (57 percent), and Asia-Pacific (17 percent).[207] Some of the top competitors were listed in 2007 by Mashable.[208]

The website has won awards such as placement into the "Top 100 Classic Websites" by PC Magazine in 2007,[209] and winning the "People's Voice Award" from the Webby Awards in 2008.[210] 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.[211]

On March 2010, Judge Richard Seeborg issued an order approving the class settlement in Lane v. Facebook, Inc.,[212] the class action lawsuit arising out of Facebook's Beacon program.

In 2010, Facebook won the Crunchie "Best Overall Startup Or Product" for the third year in a row[213] and was recognized as one of the "Hottest Silicon Valley Companies" by Lead411.[214] However, in a July 2010 survey performed by the American Customer Satisfaction Index, Facebook received a score of 64 out of 100, placing it in the bottom 5% of all private-sector companies in terms of customer satisfaction, alongside industries such as the IRS e-file system, airlines, and cable companies. The reasons why Facebook scored so poorly include privacy problems, frequent changes to the website's interface, the results returned by the News Feed, and spam.[215]

Total active users[N 1]
DateUsers
(in millions)
Days laterMonthly growth[N 2]
August 26, 2008100[216]1,665178.38%
April 8, 2009200[217]22513.33%
September 15, 2009300[218]1609.38%
February 5, 2010400[219]1436.99%
July 21, 2010500[220]1664.52%
January 5, 2011600[221][N 3]1683.57%
May 30, 2011700[222]1453.45%
September 22, 2011800[223]1153.73%
April 24, 2012900[224]2151.74%
October 4, 20121,000[225]1632.04%
March 31, 20131,110[6]1781.67%

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.[226] In March 2009, the New Zealand High Court associate justice David Gendall allowed for the serving of legal papers on Craig Axe by the company Axe Market Garden via Facebook.[227][228] Employers (such as Virgin Atlantic Airways) have also used Facebook as a means to keep tabs on their employees and have even been known to fire them over posts they have made.[229]

By 2005, the use of Facebook had already become so ubiquitous that the generic verb "facebooking" had come into use to describe the process of browsing others' profiles or updating one's own.[230] In 2008, Collins English Dictionary declared "Facebook" as its new Word of the Year.[231] In December 2009, the New Oxford American Dictionary declared its word of the year to be the verb "unfriend", defined as "To remove someone as a 'friend' on a social networking site such as Facebook. As in, 'I decided to unfriend my roommate on Facebook after we had a fight.'"[232]

In early 2010, Openbook was established, an avowed parody (and privacy advocacy) website[233] that enables text-based searches of those Wall posts that are available to "Everyone", i.e. to everyone on the Internet.

Writers for The Wall Street Journal found in 2010 that Facebook apps were transmitting identifying information to "dozens of advertising and Internet tracking companies". The apps used an HTTP referrer which exposed the user's identity and sometimes their friends'. Facebook said, "We have taken immediate action to disable all applications that violate our terms".[234]

In January 2013, the countries with the most Facebook users were:[235]

All of the above total 309 million members or about 38.6 percent of Facebook's 1 billion worldwide members.[236] As of March 2013, Facebook reported having 1.11 billion monthly active users, globally.[237]

In regards to Facebook's mobile usage, per an analyst report in early 2013, there are 192 million Android users, 147 million iPhone users, 48 million iPad users and 56 million messenger users, and a total of 604 million mobile Facebook users.[238]


Criticisms and controversies

On August 22, 2013, Yahoo News reported that Marc Maiffret, a chief technology officer of the cybersecurity firm BeyondTrust, is prompting hackers to support in raising a $10,000 reward for Khalil Shreateh. On August 20, Maiffret stated that he had already raised $9,000 in his efforts, including the $2,000 he himself contributed. He and other hackers alike have denounced Facebook for refusing Shreateh compensation. Stated Maiffret, "He is sitting there in Palestine doing this research on a five-year-old laptop that looks like it is half broken. It's something that might help him out in a big way." Facebook representatives have since responded, "We will not change our practice of refusing to pay rewards to researchers who have tested vulnerabilities against real users." Facebook representatives also claimed they'd paid out over $1 million to individuals who have discovered bugs in the past.[246]

Impact

Media impact

In April 2011, Facebook launched a new portal for marketers and creative agencies to help them develop brand promotions on Facebook.[267] The company began its push by inviting a select group of British advertising leaders to meet Facebook's top executives at an "influencers' summit" in February 2010. Facebook has now been involved in campaigns for True Blood, American Idol, and Top Gear.[268] News and media outlets such as the Washington Post,[269] Financial Times[270] and ABC News[271] have used aggregated Facebook fan data to create various infographics and charts to accompany their articles. In 2012, the beauty pageant Miss Sri Lanka Online was run exclusively using Facebook.[272]

Social impact

Facebook has affected the social life and activity of people in various ways. With its availability on many mobile devices, Facebook allows users to continuously stay in touch with friends, relatives and other acquaintances wherever they are in the world, as long as there is access to the Internet. It can also unite people with common interests and/or beliefs through groups and other pages, and has been known to reunite lost family members and friends because of the widespread reach of its network.[273] One such reunion was between John Watson and the daughter he had been seeking for 20 years. They met after Watson found her Facebook profile.[274] Another father–daughter reunion was between Tony Macnauton and Frances Simpson, who had not seen each other for nearly 48 years.[275]

Some argue that Facebook is beneficial to one's social life because they can continuously stay in contact with their friends and relatives, while others say that it can cause increased antisocial tendencies because people are not directly communicating with each other. Some studies have named Facebook as a source of problems in relationships. Several news stories have suggested that using Facebook can lead to higher instances of divorce and infidelity, but the claims have been questioned by other commentators.[276]

Health impact

Many Facebook users, especially adolescents, display references to alcohol and substance use on their Facebook profiles.[277] [278] One study of alcohol displays on underage college Facebook users found that 35.7% participant profiles displayed alcohol.[279] This can include photos of underage drinking, or status updates describing alcohol or substance use. This is particularly concerning because new social media such as Facebook can influence adolescents by acting as a “superpeer,” promoting norms of behavior among other adolescents.[280] Regardless of whether these displays represent real offline behavior or are posted just to make the Facebook user “look cool”, displaying these references may lead to an expectation by friends that the adolescent does or will drink alcohol in the future.[277]

Facebook envy

Unless you get out of Facebook and into someone's face, you really have not acted.

Thomas L. Friedman, 2012[281]

Recent studies have shown that Facebook causes negative effects on self-esteem by triggering feelings of envy, with vacation and holiday photos proving to be the largest resentment triggers. Other prevalent causes of envy include posts by friends about family happiness and images of physical beauty—such envious feelings leave people lonely and dissatisfied with their own lives. A joint study by two German universities discovered that one out of three people were more dissatisfied with their lives after visiting Facebook, and another study by Utah Valley University found that college students felt worse about their own lives following an increase in the amount of time spent on Facebook.[282][283][284]

Political impact

The stage at the Facebook – Saint Anselm College debates in 2008.

Facebook's role in the American political process was demonstrated in January 2008, shortly before the New Hampshire primary, when Facebook teamed up with ABC and Saint Anselm College to allow users to give live feedback about the "back to back" January 5 Republican and Democratic debates.[285][286][287] Charles Gibson moderated both debates, held at the Dana Center for the Humanities at Saint Anselm College. Facebook users took part in debate groups organized around specific topics, register to vote, and message questions.[288]

ABCNews.com reported in 2012 that the Facebook fanbases of political candidates have relevance for the election campaign, including:

Over a million people installed the Facebook application "US Politics on Facebook" in order to take part, and the application measured users' responses to specific comments made by the debating candidates.[289] This debate showed the broader community what many young students had already experienced: Facebook as a popular and powerful new way to interact and voice opinions. An article by Michelle Sullivan of Uwire.com illustrates how the "Facebook effect" has affected youth voting rates, support by youth of political candidates, and general involvement by the youth population in the 2008 election.[290]

In February 2008, a Facebook group called "One Million Voices Against FARC" organized an event in which hundreds of thousands of Colombians marched in protest against the Revolutionary Armed Forces of Colombia, better known as the FARC (from the group's Spanish name).[291] In August 2010, one of North Korea's official government websites and the official news agency of the country, Uriminzokkiri, joined Facebook.[292]

A man during the 2011 Egyptian protests carrying a card saying "Facebook,#jan25, The Egyptian Social Network".

In January 2011, Facebook played a major role in generating the first spark for the 2011 Egyptian revolution.[293][294] On January 14, the Facebook page of "We are all khaled Said" was started by Wael Ghoniem Create Event to invite the Egyptian people to "peaceful demonstrations" on January 25. As in Tunisia, Facebook become the primary tool for connecting all protesters, which lead the Egyptian government of Prime Minister Nazif to ban Facebook, Twitter and another websites on January 26[295] then ban all mobile and Internet connections for all of Egypt at midnight January 28. After 18 days, the uprising forced President Mubarak to resign.

In 2011, Facebook filed paperwork with the Federal Election Commission to form a political action committee under the name FB PAC.[296] In an email to The Hill, a spokesman for Facebook said "FB PAC will give our employees a way to make their voice heard in the political process by supporting candidates who share our goals of promoting the value of innovation to our economy while giving people the power to share and make the world more open and connected."[297]

Unfriending psychological impact

Although Facebook has an upside of friending people, there is also the downside of having someone unfriend or reject another person, according to psychologist Susan Krauss Whitbourne.[298] Whitbourne refers to unfriended persons on Facebook as victims of estrangement.[298] Unfriending someone is seldom a mutual decision and the person often does not know of being unfriended.[298]

In popular culture

See also

Notes

  1. ^ An "active user" is defined by Facebook as a user who has visited the website in the last 30 days.
  2. ^ "Monthly growth" is the average percentage growth rate at which the total number of active users grows each month over the specified period.
  3. ^ This value is from an investment document. The date is from when the document was revealed to the public, not the actual date that the website reached this many users.

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Further reading

External links