Everything statistical you need to know about FaceBook

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Background

The following profile is based off archival information on Mark Zuckerberg. Mark is best known for his role in the creation of TheFacebook.com, now known worldwide as Facebook. Facebook originated as “… a simple idea to establish an online directory for Harvard Students”.1 Initially, membership was limited to students at Harvard, the school Zuckerberg attended, eventually spreading out to other Ivy League schools, then colleges across the U.S. and Canada, high schools, and eventually in late 2006 the public.

Facebook Statistics

According to their statistics page, Facebook boasts over 400 million active users, 3 billion photos uploaded per month, 5 billion shared pieces of content per week, 3.5 million events per month, and more than 60 million status updates per day. Facebook is available in over 70 translations, has more than one million developers from 180 countries, and over 80,000 websites utilize Facebook Connect on external websites. The website is also one of the most widely accessed mobile websites, with over 100 million users accessing Facebook via mobile devices.2 What once began as a pet project has turned into a worldwide phenomenon that dictates the social norms many live by.

Start-up Team

TheFacebook.com was launched February 4th, 2004 and was founded primarily by Mark Zuckerberg. However, he was assisted by several co-founders including Chris Hughes, Dustin Moskovtiz, and Eduardo Saverin. Mark Zuckerberg was a computer science student at Harvard prior to dropping out of school. During the founding of Facebook, Mark was responsible for coding the original website and setting the overall direction and strategy for the company. Most recently, Mark has been serving as CEO of Facebook. Chris Hughes was also a student at Harvard and has bachelor's degrees in history and literature. Chris was the spokesperson for Facebook, and moved to Palo Alto to work on the product team after graduation. “He became the official Facebook explainer: part anthropologist, part customer-service rep, part media spokesperson.” 3 Chris most recently served as the Director of Online Organizing for MyBarackObama.com, a website instrumental to the Barack Obama presidential campaign. Dustin Moskovitz was studying Economics at Harvard and was instrumental as a leader of the technical staff. He remained a member of the Facebook staff until November 2008, when he pursued other ventures. Eduardo Saverin, the final co-founder, also obtained a degree in Economics from Harvard and was responsible for the sales and business development during the first few years of Facebook.4

Although not considered a co-founder, another integral aspect to the early success of Facebook was the involvement of Sean Parker, founder of Napster. Sean was an informal advisor to Facebook, and became the President during the Summer of 2004. Parker was also instrumental in securing early round funding, specifically through the introduction of Zuckerberg to Peter Thiel. Peter was the founder of PayPal and a venture capitalist.5

Dates of Funding

Facebook has received funding numerous times throughout its lifetime. Below are dates that the company received funding, as listed in the Facebook Timeline:6

* Summer 2004 - Facebook raises $500,000 from Peter Thiel

* May 2005 - Facebook raises $12.7 million in venture capital from Accel Partners

* April 2006 - Facebook raises $27.5 million from Greylock Partners, Meritech Capital Partners and others

* October 2007 - Facebook and Microsoft expand advertising deal to cover international markets; Microsoft takes a $240 million equity stake in Facebook

* May 2009 - Digital Sky Technologies makes a $200 million investment for preferred stock at a $10 billion valuation

Opportunity Recognition

The idea for Facebook came from the lack of a directory of students with photos and basic information at Harvard. These directories were commonly known as a face book at many schools. Mark hacked into Harvard records and created Facemash, a site that compared pictures of undergraduates with the ability to vote who was the more attractive of the two. Harvard was unpleased; however, Mark continued his efforts and created TheFacebook.com, allowing students to fill their own information onto their page. Over half the student body signed up within the first two weeks, and over two-thirds soon after that. According to an interview conducted by BusinessWeek of Zuckerberg, he says in regards to the founding of TheFacebook.com “We decided to combine social networking capabilities with a site styled to be like a directory, holding extensive information about its users, such as courses, references in campus publications, contact information, and summer plans.”7

Due to the website growing so fast, Zuckerberg took on the additional co-founders to help run, manage, and expand the business. Within a month, Facebook had expanded from Harvard to include Stanford, Columbia, and Yale. After that, Facebook was spread to schools all across the United States and Canada. The spread of networks eventually included high schools, corporate networks, and public networks. Throughout this time, Facebook introduced new features such as the news feed, video uploading, marketplace, gifts, and applications. Zuckerberg ensured that the vision of Facebook was always one-step ahead of the wants of his users. In six short years, Facebook has expanded from a pet project to a multi-billion dollar business.

Product or Service

Facebook is both a product and a service, providing a social network for users to share information and media, as well as a platform to distribute applications and advertising. Originally, Facebook began as a service back in 2004. However, through the integration of banner ads in August 2006 and the Facebook Platform in May 2007, Facebook transitioned into a product as well. According to the Facebook Factsheet, the Facebook product “…gives users easy access to core site functions and applications. Profile, Friends, Networks and Inbox - pages core to the user experience on Facebook - have a prominent place at the top of the user's profile page. Facebook applications - Photos, Notes, Groups, Events and Posted items - are displayed on the left side bar, along with any third-party applications a user has added to their account.” 8

Interestingly, Facebook has never charged or considered charging users to use the website. While advertisements are plentiful throughout the website, a subscription fee has never been used. Facebook is able to make money without having to charge users through significant advertisements that can be found throughout all aspects of the website.

Customer

Facebook has two customer types, users and advertisers. Quite literally, the customer of Facebook is anyone. In September of 2006, Mark Zuckerberg announced that Facebook would be open to the general public. “The new accessibility opens the site to all users, who will be categorized into about 500 geographic regional networks.” 9 For the first time, people did not have to join a university, high school, or work network. It was this release to the public that helped propel Facebook from 50 million active users to more than 400 million active users today.

Value Proposition

Facebook has proven useful to its customers for a myriad of reasons. Several benefits provided for users by Facebook include:

* Networking for both social and professional reasons

* Reconnect with old friends

* Communication with peers

* Information sharing

* Find and sell goods via Facebook Marketplace

* Groups of people with like interests

Studies have been conducted on social benefits of Facebook and have provided empirical results. In a study performed by researchers at Michigan State University, “Facebook usage was found to interact with measures of psychological well-being, suggesting that it might provide greater benefits for users experiencing low self-esteem and low life satisfaction.”10 It is interesting to see that people who experience low self-esteem can benefit from using Facebook. It provides them a means of staying connected with the rest of the world, instead of secluding themselves.

Advertising has been an essential aspect of the Facebook business platform. Advertising on Facebook is open to anyone as well, from individuals to corporations. Facebook allows advertisers to pay by impressions or by clicks and allows for a daily advertising budget. The site enables the targeting of specific market segments based on information provided in profiles. Facebook has simplified the process so that it is easy for anyone to do.

Distribution

Facebook.com is distributed to the customer in two ways, via the Internet and through mobile platforms. Any user is able to access Facebook.com from any internet browser, or via a mobile phone internet browser. Facebook has also developed specialized applications for Blackberry, Android, and the iPhone allowing users to upload media, change statuses, view pictures, and write on friend's walls.

The web version of Facebook has undergone a significant change almost every year from its creation through its recent 6-year anniversary. These changes are often met with intense joy or anger from the users of Facebook. It is typical to see numerous groups form soon after a change to Facebook. Most recently, the top and side navigation was changed. Although it was designed to simplify user's experience, many users have been unsatisfied by the changes.

Interesting Story

When Facebook moved their corporate office to Palo Alto, California, they were unable to rent sufficient office space. Zuckerberg and Moskovitz needed to live in various sublet apartments in order to remain out in California. Due to Sean Parker, they were able to meet Peter Thiel who gave the founders an initial investment of $500,000 for a 10% stake in the company. This valuation is far below the $10 billion recent investments have shown Facebook to be valued. However, none of this would have happened if not for another social networking site called Friendster. Had Facebook not been turned down by Battery Ventures, the website could have been completely different at this point.11

A Look Forward

Privacy is one of the most contested issues on Facebook. In late January 2010, Mark sat down with founder of web blog TechCrunch, Michael Arrington, and said that people do not want privacy anymore. He believes people share more information with more people these days than ever before. Mark feels that in the future people will eventually begin to share all information about their lives, and that they willingly wish to share it with everyone.12

Another area Mark sees Facebook moving towards in the future is Facebook credits, which was designed in partnership with PayPal. Facebook credits are purchased in three amounts of 50, 100, or 200 credits at each given time. Facebook is able to hold onto the money from the credits in an account until the credits are used, and the money is paid out. Facebook is able to earn money from the interest, Facebook gifts, and from transaction fees.13

My Thoughts

Mark Zuckerberg has built a product that revolutionized the world. He has changed the norm of privacy into one of freedom, and allowed people to connect in a variety of ways. One way in which this is most evident to me is by looking at my parent's Facebook profiles. They have reconnected with friends from college almost thirty years ago. Where it was once inconceivable to see or hear from many of those people after a few years post-graduation, it is now possible to maintain friendships for life.

The sheer amount of media and information shared on Facebook is staggering as well. World events are broken and commented on almost as soon as they occur. I was made aware of Michael Jackson's death by checking my Facebook the day he died. We now have the ability to share content before the news can get it on live television.

No one, spare Mark Zuckerberg, can truly predict where Facebook will venture to next. Can a billion users on Facebook be out of the question in five to ten years? With the introduction of the One Laptop Per Child program in developing nations, and the cheap technology available today it is possible to see people from all over on Facebook. Recently, companies like Garmin, Google, and Dell have developed their own mobile phones for release. Is it far-fetched to imagine a Facebook phone in the future?

End Notes

1. "BW Online | July 21, 2004 | A Hot New Twist on the Old College Try." BusinessWeek - Business News, Stock Market & Financial Advice. 21 July 2004. Web. 19 Feb. 2010. <http://www.businessweek.com/smallbiz/content/jul2004/sb20040721_8133.htm>.

2. "Facebook | Statistics." Welcome to Facebook. 2010. Web. 22 Feb. 2010. <http://www.facebook.com/press/info.php?statistics>.

3. "How Chris Hughes Helped Launch Facebook and the Barack Obama Campaign | Page 2 | Fast Company." FastCompany.com - Where ideas and people meet | Fast Company. 1 Apr. 2009. Web. 21 Feb. 2010. <http://www.fastcompany.com/magazine/134/boy-wonder.html?page=0%2C1>.

4. "Facebook | Founder Bios." Welcome to Facebook. 2010. Web. 23 Feb. 2010. <http://www.facebook.com/press/info.php?founderbios>.

5. Rosen, Ellen. "Student's Start-Up Draws Attention and $13 Million." The New York Times - Breaking News, World News & Multimedia. 26 May 2005. ?_Web. 23 Feb. 2010. <http://www.nytimes.com/2005/05/26/business/26sbiz.htmlr=3&sq=thefacebook%20parker&st=nyt&adxnnl=1&scp=1&adxnnlx=1266948260-vM/tT2fy37/ZZo47ydqT5w>.

6. "Facebook | Timeline." Welcome to Facebook. 2010. Web. 22 Feb. 2010. <http://www.facebook.com/press/info.php?timeline>.

7. BusinessWeek.

8. "Facebook | Factsheet." Welcome to Facebook. 2010. Web. 23 Feb. 2010. <http://www.facebook.com/press/info.php?factsheet>.

9. Graham, David. "Facebook to let public join site | The Chronicle." The Chronicle | The Independent Daily at Duke University. 15 Sept. 2006. Web. 23 Feb. 2010. <http://dukechronicle.com/node/140228>.

10. Ellison, Nicole B., Charles Steinfeld, and Cliff Lampe. "The Benefits of Facebook "Friends:" Social Capital and College Students' Use of Online Social Network Sites." Journal of Computer-Mediated Communication 12.4 (2007). The Benefits of Facebook "Friends:" Social Capital and College Students' Use of Online Social Network Sites. Journal of Computer-Mediated Communication, 30 July 2007. Web. 23 Feb. 2010. <http://jcmc.indiana.edu/vol12/issue4/ellison.html>.

11. Kirsner, Scott. "Why Facebook went west - The Boston Globe." Boston.com. 9 Sept. 2006. Web. 23 Feb. 2010. <http://www.boston.com/business/technology/articles/2007/09/09/why_facebook_went_west/>.

12. Berridge, Ed. "No one wants privacy these days - The Inquirer." THE INQUIRER - Microprocessor, Server, Memory, PCS, Graphics, Networking, Storage. 11 Jan. 2010. Web. 24 Feb. 2010. <http://www.theinquirer.net/inquirer/news/1585459/no-privacy-days>.

13. O'Neil, Nick. "Facebook's Decision To Print Money Out Of Thin Air." All Facebook - The Unofficial Facebook Blog - Facebook News, Facebook Marketing, Facebook Business, and More! 18 Feb. 2010. Web. 23 Feb. 2010. <http://www.allfacebook.com/2010/02/facebooks-decision-to-print-money-out-of-thin-air/>.

Works Cited

Berridge, Ed. "No one wants privacy these days - The Inquirer." THE INQUIRER - Microprocessor, Server, Memory, PCS, Graphics, Networking, Storage. 11 Jan. 2010. Web. 24 Feb. 2010. <http://www.theinquirer.net/inquirer/news/1585459/no-privacy-days>.

"BW Online | July 21, 2004 | A Hot New Twist on the Old College Try." BusinessWeek - Business News, Stock Market & Financial Advice. 21 July 2004. Web. 19 Feb. 2010. <http://www.businessweek.com/smallbiz/content/jul2004/sb20040721_8133.htm>.

Ellison, Nicole B., Charles Steinfeld, and Cliff Lampe. "The Benefits of Facebook "Friends:" Social Capital and College Students' Use of Online Social Network Sites." Journal of Computer-Mediated Communication 12.4 (2007). The Benefits of Facebook "Friends:" Social Capital and College Students' Use of Online Social Network Sites. Journal of Computer-Mediated Communication, 30 July 2007. Web. 23 Feb. 2010. <http://jcmc.indiana.edu/vol12/issue4/ellison.html>.

"Facebook | Factsheet." Welcome to Facebook. 2010. Web. 23 Feb. 2010. <http://www.facebook.com/press/info.php?factsheet>.

"Facebook | Founder Bios." Welcome to Facebook. 2010. Web. 23 Feb. 2010. <http://www.facebook.com/press/info.php?founderbios>.

"Facebook | Statistics." Welcome to Facebook. 2010. Web. 22 Feb. 2010. <http://www.facebook.com/press/info.php?statistics>.

"Facebook | Timeline." Welcome to Facebook. 2010. Web. 22 Feb. 2010. <http://www.facebook.com/press/info.php?timeline>.

Graham, David. "Facebook to let public join site | The Chronicle." The Chronicle | The Independent Daily at Duke University. 15 Sept. 2006. Web. 23 Feb. 2010. <http://dukechronicle.com/node/140228>.

"How Chris Hughes Helped Launch Facebook and the Barack Obama Campaign | Page 2 | Fast Company." FastCompany.com - Where ideas and people meet | Fast Company. 1 Apr. 2009. Web. 21 Feb. 2010. <http://www.fastcompany.com/magazine/134/boy-wonder.html?page=0%2C1>.

Kirsner, Scott. "Why Facebook went west - The Boston Globe." Boston.com. 9 Sept. 2006. Web. 23 Feb. 2010. <http://www.boston.com/business/technology/articles/2007/09/09/why_facebook_went_west/>.

O'Neil, Nick. "Facebook's Decision To Print Money Out Of Thin Air." All Facebook - The Unofficial Facebook Blog - Facebook News, Facebook Marketing, Facebook Business, and More! 18 Feb. 2010. Web. 23 Feb. 2010. <http://www.allfacebook.com/2010/02/facebooks-decision-to-print-money-out-of-thin-air/>.

Rosen, Ellen. "Student's Start-Up Draws Attention and $13 Million." The New York Times - Breaking News, World News & Multimedia. 26 May 2005. Web. 23 Feb. 2010. <http://www.nytimes.com/2005/05/26/business/26sbiz.html?_r=3&sq=thefacebook%20parker&st=nyt&adxnnl=1&scp=1&adxnnlx=1266948260-vM/tT2fy37/ZZo47ydqT5w>.

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