Facebook Origins, Expansion, and Operations

From Wikipedia
Origins and expansion
Mark Zuckerberg founded “The Facebook” in February 2004, while attending Harvard University, with support from Andrew McCollum and Eduardo Saverin. By the end of the month, more than half of the undergraduate population at Harvard were registered on the service. At that time, Zuckerberg was joined by Dustin Moskovitz and Chris Hughes for site promotion and Facebook expanded to Stanford, Columbia, and Yale.

This expansion continued in April of 2004 when it expanded to the rest of Ivy League and a few other schools. At the end of the school year, Zuckerberg and Moskovitz moved to Palo Alto, California with McCollum, who had a summer internship at Electronic Arts. They rented a house near Stanford University where they were joined by Adam D’Angelo and Sean Parker. Soon McCollum decided to leave EA and help with the development of Facebook and a companion website, Wirehog, full-time.

In September, Divya Narendra, Cameron Winklevoss and Tyler Winklevoss, the owners of the social networking website HarvardConnection, subsequently changed to ConnectU, filed a lawsuit against Facebook, alleging that Zuckerberg had illegally used source code intended for the website they asked him to build for them. Also at that time, Facebook received approximately $500,000 from PayPal co-founder Peter Thiel in an angel round. By December, Facebook’s user base had exceeded one million.

Operations
The site is free to users and generates revenue from advertising including banner ads and sponsored groups (in April 2006, revenue was rumored to be over $1.5 million per week). Users create profiles that often contain photos and lists of personal interests, exchange private or public messages, and join groups of friends. The viewing of detailed profile data is restricted to users from the same network or confirmed friends.

According to TechCrunch, “about 85% of students in previously supported colleges have a profile on the site. Of those who are signed up, 60% log in daily. About 85% log in at least once a week, and 93% log in at least once a month.” According to Chris Hughes, spokesman for Facebook, “People spend an average of 19 minutes a day on Facebook.” In a 2006 study conducted by Student Monitor, a New Jersey-based limited liability company specialising in research concerning the college student market, Facebook was named as the second most “in” thing among undergraduates, tied with beer and sex and losing only to the iPod.