Saturday, December 19, 2009

Business

Facebook

Updated May 27, 2009

Facebook, by some measurements the most popular social network with more than 200 million active users worldwide, is one of the fastest-growing and best-known sites on the Internet today.

The company, founded in 2004 by a Harvard sophomore, Mark Zuckerberg, began life catering first to Harvard students and then to all high school and college students. It has since evolved into a broadly popular online destination used by both teenagers and adults of all ages.

Like other social networks, the site allows its users to create a profile page and forge online links with friends and acquaintances. It has distinguished itself from rivals, partly by imposing a spartan design ethos and limiting how users can change the appearance of their profile pages. That has cut down on visual clutter and threats like spam, which plague rival social networks. In May 2007, Facebook unveiled an initiative called Facebook Platform, inviting third-party software makers to create programs for the service and to make money on advertising alongside them. The announcement stimulated the creation of hundreds of new features or "social applications" on Facebook , from games to new music and photo sharing tools, which had the effect of further turbo-charging activity on the site.

In May 2009, a Russian investment firm, Digital Sky Technologies, invested $200 million in Facebook in return for a 1.96 percent stake. The investment values Facebook's preferred stock at $10 billion, a $5 billion drop from October 2007 when Microsoft paid $240 million for a 1.6 percent stake. With the latest round of financing, Facebook has raised about $600 million since it was founded in 2004.

At the time of Microsoft's investment in 2007, Facebook's $15 billion valuation drew criticism for being unrealistically high and a sign of a bubble in social network investments. With the new valuation, Facebook is demonstrating to its critics that it is living up to its early promise.

Facebook's rise has been marked by several controversies. Three other Harvard students maintain that they came up with the original idea and that Mr. Zuckerberg, whom they had hired to write code for the site, stole the idea and surreptitiously created a rival company. Facebook has denied the allegations; a lawsuit is pending.

Another Harvard classmate, Aaron Greenspan, asserts that he created the underlying architecture for both companies, but has declined to enter the legal fray .

In November 2007, Facebook again created a storm when it announced a new advertising system called Beacon, in which users' purchases or activities on some 40 partner sites were broadcast to their Facebook friends. Some users claimed that they were not adequately warned about the feature, and the political activist group MoveOn.org organized a protest group on Facebook, which attracted more than 70,000 members.

In December, Facebook capitulated to a key demand of the protesters by offering users an easy way to decline to take part in Beacon.

In February 2009, when Facebook updated its terms, it deleted a provision that said users could remove their content at any time, at which time the license would expire. Further, it added new language that said Facebook would retain users’ content and licenses after an account was terminated.

After a wave of protests from its users, Facebook said that it would withdraw changes to its terms of service. Mr. Zuckerberg said that Facebook’s next revision of terms would reflect “a new approach” and would be “a substantial revision from where we are now.”

ARTICLES ABOUT FACEBOOK

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A Facebook Christmas Love Story
A Facebook Christmas Love Story

How Facebook cured my holiday loneliness.

December 20, 2009
    Facebook to Monitor Berlusconi Content

    The move comes after the fan page for Massimo Tartaglia, the man who is accused of hitting Prime Minister Silvio Berlusconi, amassed almost 100,000 users in less than 48 hours.

    December 16, 2009
      Russians Buy Stake in Web Games
      Russians Buy Stake in Web Games

      Digital Sky Technologies, the Russian firm that invested more than $200 million in Facebook, is leading a group that is buying a $180 million stake in Zygna, a creator of online games.

      December 16, 2009
        Viruses That Leave Victims Red in the Facebook
        Viruses That Leave Victims Red in the Facebook

        Viruses are rampaging through social networking sites, sending out humiliating messages to friends and followers.

        December 14, 2009
          Twitter Tapping

          Privacy law was largely created in the pre-Internet age, and new rules are needed to keep up with the ways people communicate today.

          December 13, 2009
            For Judges on Facebook, Friendship Has Limits

            A Florida ethics panel ruled that to avoid the appearance of a conflict of interest, judges and lawyers can’t “friend” one another.

            December 11, 2009
              Two Ways to See Friends

              What is the difference between the “Live Feed” and the “News Feed” on Facebook?

              November 26, 2009
                Facebook Will Form 2 Classes of Stock
                Facebook Will Form 2 Classes of Stock

                The move by the social network is a rudimentary step down the path to becoming a public company.

                November 25, 2009
                  The Boundaries of a Breakup
                  The Boundaries of a Breakup

                  If I can snoop on my ex-girlfriend online, then why shouldn’t she be free to befriend my grandpa?

                  November 22, 2009
                    A Friend’s Tweet Could Be an Ad

                    A group of start-up marketers see value in getting regular people to send a sentence or two of text to their friends and admirers.

                    November 22, 2009
                      Luxury Brands and the Case for $4,000 Sunglasses
                      Luxury Brands and the Case for $4,000 Sunglasses

                      Technology is not just changing the way that high-end brands communicate with their customers. It is also broadening the definition of luxury itself.

                      November 19, 2009
                        How to Market Your Business With Facebook

                        The social network is also a place to find new customers and discover a treasure trove of demographic data.

                        November 12, 2009
                          I’m Innocent. Just Check My Status on Facebook.
                          I’m Innocent. Just Check My Status on Facebook.

                          After a status update on the Facebook page of a robbery suspect provided an alibi, the Brooklyn district attorney’s office dropped the charge against him.

                          November 12, 2009
                            Virtual Goods Start Bringing Real Paydays

                            It is quickly becoming commonplace for people to spend a few dollars to get ahead in an online game or to give a friend a gift on a social network.

                            November 7, 2009
                              Despite Slump, Venture Firm Sets Up $575 Million Fund

                              Greylock Partners hired a new partner, Reid Hoffman, the founder of LinkedIn.

                              November 3, 2009

                                SEARCH 263 ARTICLES ABOUT FACEBOOK:

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                                Room for Debate Blog
                                Facebook Rules
                                Facebook Rules

                                Facing backlash, Facebook reversed its policy to keep users’ data even after they terminate their account. What do social networking sites owe their users?

                                Multimedia

                                Vows: Robin and Will

                                Robin Lester and William Kenton III met through Will's sister. When a Facebook status update led to a Scrabble game and a long outing at Rockaway Beach, they realized their feelings for one another.

                                New Media and Iran's Election

                                Rob Mackey, the Lede blogger, has been following the debate over the presidential election online.

                                The Man Behind Facebook

                                Facebook just surpassed MySpace in its unique monthly users, reports CNBC's Julia Boorstin.

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