In February 2004, a Harvard Undergraduate name Mark Zuckerberg and two of his roommates built the earliest version of Facebook as an alternative to Harvard's printed student directory. With a fast and simple interface, Facebook incorporated the basic features of a social networking site: user profiles and connection between profiles.
In May of 2005, Facebook raised $12.7 million from Accel Partner and Theil at a rumored $100 million valuation. The site had expanded to more than 800 colleges networks out of 2,000 in the United States.
In April 2006, Facebook raised $27,5 million from Greylock partners, Meritech Capital Partners, Accel, and Theil at a valuation reported to be about $500 million. During the summer, Zuckerberg rejected a $1 billion acquisition offer from Yahoo!, convincing Facebook's board of Directors that the company would be more on its own.
By August, the company had signed a three-year agreement that made Microsoft its exclusive third-party provider of advertising on Facebook's U.S. Facebook also introduced a series of new features, including blogging and mobile Functionality.
In September 2006, Facebook introduced News Feed, a timeline on the user's homepage that revealed the recent activities of friends. Facebook also launched Mini-Feed, a section of the user's profiles pages that displayed that individual's recent activities to visitors.
To achieve its ambitious goals, Facebook pursued three strategies:
- It added features that made it easier for information to spread through users social connection.
- Facebook's membership was opened to the world.
- The Company created a platform for developers to build applications that would the site more useful.
At the end of September 2006, facebook announced that it would open its registration to all users. In the eight months following open registration, Facebook's monthly unique visitor count increased by about 10% per month, from 13.3 million in September 2006 to 26.7 million in May 2007.
Facebook Platform Background
The platform convinced many industry observers that Facebook was not just another flash-in-the-pan social networking site. In October 2007, Facebook received a $240 million investment from Microsoft that valued the startup at $15 billion. By year-end 2007, Facebook had increased its headcount to 450 by poaching talent from Google and other Internet leaders. The company was rapidly expanding overseas and was catching up to my space, its leading competitor in the U.S. market.
But 2007 was not without setbacks. Goggle had responded swiftly to Facebook platform with is Open Social provided an application programming interface (API) that was adopted by many of Facebook's social networking rivals. Relying on a single API allowed third-party developers to avoid the cost of creating different versions of their application for each social networking site. As the hype around Facebook Platform subsided, some pundits also argued that the platform had failed to live up to its promise as an operating system, because most of its application were trivial and juvenile.
A Brief History of Social Networking Site
By mid-2007, social networking sites had become leading Internet destination, reaching 115 million U.S. visitors-64% of total U.S., Internet users. Social networking sites had emerged in the late 1990s as web-based services that allowed users to: 1) construct profile that reflected that identities, 2) connect with other users profiles, 3) view other users profiles and connections, and 4) communicate and share personal information.
Predecessors to social networking sites fulfilled some of these functions. The innovation of social networking sites was combining all four elements in a context where relationship between users were displayed. This collective representation of users relationship facilitated online communication and social discovery.
First Generation: SixDegree, Founded in 1997, SixDegree.com was generally regarded as the first social networking site. Following its launch, a number of community forum sites based on ethnicity or geography evolved into social networking sites, including AsianAvenue, Korea's Cyworld, and BlackPlanet.
Second Generation: Friendster. In 2002, Friendster expanded upon the premise of SixDegrees with more detailed profile, photo sharing, messaging, and testimonials. Its founder, Jonathan Abrams, described Friendster as "a way to meet people online through your friends. While initially conceived by Abrams as a way to find dates, most users relied on the site as a mechanism for keeping up with friends and meeting friends of friends.
Third Generation: MySpace. Chris DeWolfe and Tom Anderson launched MySpace in 2003 as an alternative to Friendster. MySpace quickly emerged as the market leader in the third generation of social networking sites by addressing Friendster's shortcomings and by providing users with functionality that encouraged self-expression.
Compared to Friendster, MySpace was also more responsive to users preferences. It permitted "fake" profiles and quickly iterated its product, adding blogs, message boards, and support for embeddable "widgets". Finally, MySpace initially limited its registration to U.S.-Based users, preventing network effects from snowballing into geographic clusters whose members could not communicate.
Facebook differed from most social networking sites in two ways. First, it initially restricted membership to university networks, so that only students with an ".edu" email account could register. Second, users could not access profiles of their Facebook friends and of other students in their network, meaning that a student at Harvard could only view profiles of other Harvard Student.
CASE STUDY FACEBOOK PLATFORM
Facebook's founder and CEO, Mark Zuckerberg, hesitated. In an interview on the popular U.S. TV news program, 60 minutes, he had just been asked about the recent backlash against Facebook's controversial Beacon advertising service. In the month preceding the interview, Beacon had set off a flood of criticism from the Facebook users, journalists, and privacy activist.
In 2007 he announced Facebook Platform, a set of robust tools that enable third-party developers to build applications for Facebok. Zuckerberg explained, " We want to make Facebook into something of an operating system so you can run full applications. In February 2007, Zuckerberg and co-founders launch Facebook at Harvard.
Facebook platform with is Open Social provided an application programming interface (API) that was adopted by many of Facebook's social networking rivals. Relying on a single API allowed third-party developers to avoid the cost of creating different versions of their application for each social networking site.
While millions of Facebook users installed application, other criticized Facebook platform for failing to live up to its promise. Tech journalist Kara Swisher wrote, "As popular as those apps have become, what Zuckerberg and the widget-makers have wrought is mostly silly, useless and time-Supporters countered that Facebook applications were mechanisms for deeper social interaction and self-expression, helping facebook provide the kind of engaging environment that MySpace offered.
Facebook platform tools not only alleviated developers design challenges, but also enable applications to spread virally through numerous integration points, including the user's Profiles, News Feed, Mini-Feed, and Notifications. Facebook allowed developers to keep all advertising and transactional revenue generated through their applications, which contributed to an overwhelmingly positive initial reaction from the developer community.
The Facebook Platform is a set of tools that enables developers to build applications for Facebook:
- Facebook API - Facebok's application programming interface enables applications to interact with Facebook's system and data
- Facebook Query Language (FQL) - Facebok developed its own query language (a variant of SQL) that allows applications to interact with Facebook's database directly.
- Facebook Markup Language (FBML) - Facebook also developed a variant of HTML that enables applications to access Facebook features and visual elements, making it easy for applications to preserve the site's functionality and look-and-feel.
The API and FQL allow application to access user-specific data, making it possible for applications to leverage user content, activity, and relationship. Through the API and FQL, application developers can access data about user profiles, friends, events, groups, marketplace activity, pages, and photo. Moreover, the API and FQL make it possible for application to interact with the News Feed, Mini-Feed, and send Notification, providing, mechanism for viral distribution through Facebook.
FBML makes it easy for application developers to build applications that are visually consistent with Facebook's design and functionality, using social data tags, sanitization tags, design tags, component tags, and control tags.
Facebook application have a number of integration points within the Facebook environment, including product directory section of the site, a presence on the left navigation menu on a user's profile, a dedicated Canvas page for the application, a presence in the user's Profile, as well as activity on News Feed, Mini-Feed, Notification, Requests, and email alert.
When he unveiled Facebook Ads in Noember 2007, Mark Zuckerberg had said, "Once every hundred years, media changes."
Zuckerberg and his colleagues could pursue many priorities during 2008, including international expansion, strengthening Facebook Platform, and grating users grater control over what information was accessible to different groups of friends. The facebook team would also confront decisions about long-term opportunities, for example, whether to develop payment services, collaborative applications, future incarnations of Social Ads, or a search product to rival Google's.
Facebook Monetization Opportunities
- Micropayment Processing, Much as Paypal developed a payment processing platform around eBay's services.
- Facebook as Portal, Facebook could grow to become the universal start page for the Web.
- Internal and Third-party advertising Network. As Social Ads gain traction, Facebook could launch an advertising network that place ads on other websites.
- Social Search. With is million of users and depth o data not currently indexed by Google, Facebook could build a search engine