AIB Featured Business Facebook
Founded in February 2004, Facebook is currently the world’s largest online social media platform. Originally named “Thefacebook”, the program was created to serve as a directory for Harvard University students to network with one and other. Founder Mark Zuckerberg and fellow Harvard students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes initially restricted membership to Harvard students only, but were quickly blown away by the response. Within the first month, more than half of the undergraduates at the college were registered and after two months of existence it expanded to include the universities of Columbia, Yale and Stanford. In 2006 after just two years of business, Facebook had grown so rapidly that anyone over the age of 13 with a valid email address could become a member.
With a mission to “give people the power to share and make the world more open and connected”, Facebook prompts members to create a user profile after registering on the site. Once set up, users add others as ‘friends’, can send each other messages, share content and interact on a number of different forums. In addition, users can join common-interest groups both in a public and ‘invite-only’ environment. Once friends, users can also categorise their contacts into chosen lists such as ‘Close Friends’. Businesses can also utilise Facebook, with the main goals of driving online sales, increasing local sales, promoting your app, and raising brand awareness in mind.
Today Facebook boasts 1.18 billion monthly active users worldwide, a figure which reflects the rapid growth rate it has continued to experience over the past 11 years. The platforms is used all over the world for a variety of reasons, from staying connected with loved ones, to business purposes. This success however has not been without its controversies; founder Mark Zuckerberg’s initial legal battle is likely to be the most noteworthy. Documented in the movie The Social Network, Zuckerberg was sued by three Harvard seniors who accused him of intentionally misleading them into believing he would help them build a similar platform. They claimed that the concept of Facebook was their idea, and ended up settling in 2008 for 1.2 million shares, worth $300 million.
Despite additional controversies, Facebook has continued to evolve into a multibillion-dollar profitable organisation. One of Zuckerberg’s more famous quotes about his leadership with Facebook reflects the innovative culture which exists internally. “In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks,” he said. What helped Facebook progress from a directory into a profitable website was the introduction of Facebook Advertising. This is now the main source of revenue for the platform, with a reported two million active advertisers in the month of February 2015. In addition, it became the fastest company in the Standard & Poor’s 500 Index to reach a market cap of $250 billion earlier this year.
What do you think?
Overall, it is clear that Facebook has experienced a remarkable business journey since its inception in 2004. I am interested to hear from our audience though, what do you admire most about Facebook’s journey? Is it the ability to turn an idea into a reality, or to triumph over challenges? Comment below with your views and join the AIB conversation.
This article was written by Laura Hutton on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Facebook; Facebook Careers; Wikipedia; TechCrunch; Facebook for Business; Brainy Quote and Bloomberg Business.
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