Facebook is an American online social media and social networking service company based in Menlo Park, California. Its website was launched on February 4, 2004, by Mark Zuckerberg, along with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes.
The founders initially limited the website's membership to Harvard students. Later they expanded it to higher education institutions in the Boston area, the Ivy League schools, and Stanford University. Facebook gradually added support for students at various other universities, and eventually to high school students. Since 2006, anyone who claims to be at least 13 years old has been allowed to become a registered user of Facebook, though variations exist in this requirement, depending on local laws. The name comes from the face book directories often given to American university students. Facebook held its initial public offering (IPO) in February 2012, and began selling stock to the public three months later, reaching an original peak market capitalization of $104 billion, a new record. Facebook makes most of its revenue from advertisements that appear onscreen.
Facebook can be accessed from a large range of devices with Internet connectivity, such as desktop computers, laptops and tablet computers, and smartphones. After registering, users can create a customized profile indicating their name, occupation, schools attended and so on. Users can add other users as "friends", exchange messages, post status updates, share photos, videos and links, use various software applications ("apps"), and receive notifications of other users' activity. Additionally, users may join common-interest user groups organized by workplace, school, hobbies or other topics, and categorize their friends into lists such as "People From Work" or "Close Friends". Additionally, users can report or block unpleasant people.
Facebook has more than 2.2 billion monthly active users as of January 2018. Its popularity has led to prominent media coverage for the company, including significant scrutiny over privacy and the psychological effects it has on users. In recent years, the company has faced intense pressure over the amount of fake news, hate speech and depictions of violence prevalent on its services, all of which it is attempting to counteract.
On May 1, 2018, Facebook announced its plans to launch a new dating service. According to Mark Zuckerberg: "There are 200 million people on Facebook that list themselves as single, so clearly there's something to do here". In the wake of the Cambridge Analytica data mining scandal, the service is being developed with privacy features, and friends will be unable to view one's dating profile.
Video Facebook
History
2003-2006: Thefacebook, Thiel investment, and name change
Zuckerberg wrote a program called "Facemash" in 2003 while attending Harvard University as a sophomore (second year student). According to The Harvard Crimson, the site was comparable to Hot or Not and used "photos compiled from the online facebooks of nine Houses, placing two next to each other at a time and asking users to choose the "hotter" person". Facemash attracted 450 visitors and 22,000 photo-views in its first four hours online. The Facemash site was quickly forwarded to several campus group list-servers, but was shut down a few days later by the Harvard administration. Zuckerberg faced expulsion and was charged by the administration with breach of security, violating copyrights, and violating individual privacy. Ultimately, the charges were dropped. Zuckerberg expanded on this initial project that semester by creating a social study tool ahead of an art history final exam. He uploaded all art images to a website, each of which was featured with a corresponding comments section, then shared the site with his classmates, and people started sharing notes.
A "face book" is a student directory featuring photos and basic information. In 2003, there were no universal online facebooks at Harvard, with only paper sheets distributed and private online directories. Zuckerberg told the Crimson that "Everyone's been talking a lot about a universal face book within Harvard. [...] I think it's kind of silly that it would take the University a couple of years to get around to it. I can do it better than they can, and I can do it in a week." In January 2004, Zuckerberg began writing code for a new website, known as "TheFacebook", with the inspiration coming from an editorial in the Crimson about Facemash, stating that "It is clear that the technology needed to create a centralized Website is readily available ... the benefits are many." On February 4, 2004, Zuckerberg launched "TheFacebook", originally located at thefacebook.com.
Six days after the site launched, Harvard seniors Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra accused Zuckerberg of intentionally misleading them into believing that he would help them build a social network called HarvardConnection.com. They claimed that he was instead using their ideas to build a competing product. The three complained to The Harvard Crimson and the newspaper began an investigation. They later filed a lawsuit against Zuckerberg, subsequently settling in 2008 for 1.2 million shares (worth $300 million at Facebook's IPO).
Membership was initially restricted to students of Harvard College; within the first month, more than half the undergraduates at Harvard were registered on the service. Eduardo Saverin, Dustin Moskovitz, Andrew McCollum, and Chris Hughes joined Zuckerberg to help manage the growth of the website. In March 2004, Facebook expanded to the universities of Columbia, Stanford, and Yale. It later opened to all Ivy League colleges, Boston University, New York University, MIT, Washington and gradually most universities in the United States and Canada.
In mid-2004, entrepreneur Sean Parker--an informal advisor to Zuckerberg--became the company's president. In June 2004, Facebook moved its operations base to Palo Alto, California. It received its first investment later that month from PayPal co-founder Peter Thiel. In 2005, the company dropped "the" from its name after purchasing the domain name facebook.com for US$200,000. The domain facebook.com belonged to AboutFace Corporation before the purchase. This website last appeared on April 8, 2005; from April 10, 2005, to August 4, 2005, this domain gave a 403 error.
In May 2005, Accel Partners invested $12.7 million in Facebook, and Jim Breyer added $1 million of his own money. A high-school version of the site was launched in September 2005, which Zuckerberg called the next logical step. (At the time, high-school networks required an invitation to join.) Facebook also expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.
2006-2012: Public access, Microsoft alliance and rapid growth
On September 26, 2006, Facebook was opened to everyone at least 13 years old with a valid email address. In late 2007, Facebook had 100,000 business pages (pages which allowed companies to promote themselves and attract customers). These started as group pages, but a new concept called company pages was planned. Pages began rolling out for businesses in May 2009. On October 24, 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion. Microsoft's purchase included rights to place international advertisements on the social networking site.
In October 2008, Facebook announced that it would set up its international headquarters in Dublin, Ireland. Almost a year later, in September 2009, Facebook said that it had turned cash flow positive for the first time. A January 2009 Compete.com study ranked Facebook the most used social networking service by worldwide monthly active users. Entertainment Weekly included the site on its end-of-the-decade "best-of" list saying, "How on earth did we stalk our exes, remember our co-workers' birthdays, bug our friends, and play a rousing game of Scrabulous before Facebook?"
Traffic to Facebook increased steadily after 2009. The company announced 500 million users in July 2010, and according to its data, half of the site's membership used Facebook daily, for an average of 34 minutes, while 150 million users accessed the site by mobile. A company representative called the milestone a "quiet revolution." In November 2010, based on SecondMarket Inc. (an exchange for privately held companies' shares), Facebook's value was $41 billion. The company had slightly surpassed eBay to become the third largest American web company after Google and Amazon.com.
In early 2011, Facebook announced plans to move its headquarters to the former Sun Microsystems campus in Menlo Park, California. In March 2011, it was reported that Facebook was removing about 20,000 profiles every day for violations such as spam, graphic content, and underage use, as part of its efforts to boost cyber security. Statistics by DoubleClick showed that Facebook reached one trillion page views in the month of June 2011, making it the most visited website tracked by DoubleClick. According to a Nielsen study, Facebook had in 2011 become the second-most accessed website in the U.S. behind Google.
2012-2013: IPO, lawsuits and one-billionth user
Facebook eventually filed for an initial public offering on February 1, 2012. Facebook held an initial public offering on May 17, 2012, negotiating a share price of US$38. The company was valued at $104 billion, the largest valuation to date for a newly listed public company. Facebook began selling stock to the public and trading on the NASDAQ on May 18, 2012. Based on its 2012 income of $5 billion, Facebook joined the Fortune 500 list for the first time in May 2013, ranked in position 462.
Facebook filed their S1 document with the Securities and Exchange Commission on February 1, 2012. The company applied for a $5 billion IPO, one of the biggest offerings in the history of technology. The IPO raised $16 billion, making it the third-largest in U.S. history.
The shares began trading on May 18; the stock struggled to stay above the IPO price for most of the day, but set a record for the trading volume of an IPO (460 million shares). The first day of trading was marred by technical glitches that prevented orders from going through; only the technical problems and artificial support from underwriters prevented the stock price from falling below the IPO price on the day. In March 2012, Facebook announced App Center, a store selling applications that operate via the website. The store was to be available on iPhones, Android devices, and mobile web users.
On May 22, 2012, the Yahoo! Finance website reported that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS), cut their earnings forecasts for the company in the middle of the IPO process. The stock had begun its freefall by this time, closing at 34.03 on May 21 and 31.00 on May 22. A "circuit breaker" trading curb was used in an attempt to slow down the stock price's decline. Securities and Exchange Commission Chairman Mary Schapiro, and Financial Industry Regulatory Authority (FINRA) Chairman Rick Ketchum, called for a review of the circumstances surrounding the IPO.
Facebook's IPO was consequently investigated, and was compared to a "pump and dump" scheme. A class-action lawsuit was filed in May 2012 because of the trading glitches, which led to botched orders. Lawsuits were filed, alleging that an underwriter for Morgan Stanley selectively revealed adjusted earnings estimates to preferred clients.
The other underwriters (MS, JPM, GS), Facebook's CEO and board, and NASDAQ also faced litigation after numerous lawsuits were filed, while SEC and FINRA both launched investigations. It was believed that adjustments to earnings estimates were communicated to the underwriters by a Facebook financial officer, who used the information to cash out on their positions while leaving the general public with overpriced shares. By the end of May 2012, Facebook's stock lost over a quarter of its starting value, which led The Wall Street Journal to label the IPO a "fiasco". Zuckerberg announced to the media at the start of October 2012 that Facebook had passed the monthly active users mark of one billion. The company's data also revealed 600 million mobile users, 219 billion photo uploads, and 140 billion friend connections.
2013-2014: Site developments, A4AI and 10th anniversary
On January 15, 2013, Facebook announced Facebook Graph Search, which provides users with a "precise answer", rather than a link to an answer by leveraging the data present on its site. Facebook emphasized that the feature would be "privacy-aware", returning results only from content already shared with the user. On April 3, 2013, Facebook unveiled Facebook Home, a user-interface layer for Android devices offering greater integration with the site. HTC announced the HTC First, a smartphone with Home pre-loaded.
On April 15, 2013, Facebook announced an alliance across 19 states with the National Association of Attorneys General, to provide teenagers and parents with information on tools to manage social networking profiles. On April 19, 2013, Facebook officially modified its logo to remove the faint blue line at the bottom of the "F" icon. The letter F moved closer to the edge of the box.
Following a campaign by 100 advocacy groups, Facebook agreed to update its policy on hate speech. The campaign highlighted content promoting domestic and sexual violence against women, and used over 57,000 tweets and more than 4,900 emails that caused withdrawal of advertising from the site by 15 companies, including Nissan UK, House of Burlesque and Nationwide UK. The social media website initially responded by stating that "while it may be vulgar and offensive, distasteful content on its own does not violate our policies". It decided to take action on May 29, 2013, after it "become clear that our systems to identify and remove hate speech have failed to work as effectively as we would like, particularly around issues of gender-based hate".
On June 12, 2013, Facebook announced on its newsroom that it was introducing clickable hashtags to help users follow trending discussions, or search what others are talking about on a topic. A July 2013 Wall Street Journal article identified the Facebook IPO as the cause of a change in the U.S.' national economic statistics, as the local government area of the company's headquarters, San Mateo County, California, became the top wage-earning county in the country after the fourth quarter of 2012. The Bureau of Labor Statistics reported that the average weekly wage in the county was US$3,240, 107% higher than the previous year. It noted the wages were "the equivalent of $168,000 a year, and more than 50% higher than the next-highest county, New York County (better known as Manhattan), at $2,107 a week, or roughly $110,000 a year."
Facebook was blocked by the Chinese government in 2009. In September 2013, the South China Morning Post announced that the block would lifted in the Shanghai Free Trade Zone "to welcome foreign companies to invest and to let foreigners live and work happily in the free-trade zone". However, a few days later, the People's Daily, the official newspaper of the Communist Party of China, dismissed the earlier report, reiterating the block on Facebook.
Facebook was announced as a member of The Alliance for Affordable Internet (A4AI) in October 2013, when the A4AI was launched. The A4AI is a coalition of public and private organizations that includes Google, Intel and Microsoft. Led by Sir Tim Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the developing world, where only 31% of people are online. Google will help to decrease Internet access prices so that they fall below the UN Broadband Commission's worldwide target of 5% of monthly income. A Reuters report, published on December 11, 2013, stated that Standard & Poor's announced the placement of Facebook on its S&P 500 index "after the close of trading on December 20". Facebook announced Q4 2013 earnings of $523 million (20 cents per share), an increase of $64 million from the previous year, as well as 945 million mobile users.
The company celebrated its 10th anniversary during the week of February 3, 2014. In each of the first three months of 2014, over one billion users logged into their Facebook account on a mobile device. As part of the company's second quarter results, Facebook announced in late July 2014 that mobile accounted for 62% of its advertising revenue, which is an increase of 21% from the previous year. By September 2014, Facebook's market capitalization had risen to over $200 billion.
Alongside other American technology figures like Jeff Bezos and Tim Cook, Zuckerberg hosted visiting Chinese politician Lu Wei, known as the "Internet czar" for his influence in the enforcement of China's online policy, at Facebook's headquarters on December 8, 2014. The meeting occurred after Zuckerberg participated in a Q&A session at Tsinghua University in Beijing, China, on October 23, 2014, where he attempted to converse in Mandarin--although Facebook is banned in China, Zuckerberg is highly regarded among the people and was at the university to help fuel the nation's burgeoning entrepreneur sector. A book of Chinese president Xi Jinping found on Zuckerberg's office desk attracted a great deal of attention in the media, after the Facebook founder explained to Lu, "I want them [Facebook staff] to understand socialism with Chinese characteristics."
2015-present: Combating fake news and other ventures
As of January 21, 2015, Facebook's algorithm is programmed to filter out false or misleading content, such as fake news stories and hoaxes, and will be supported by users who select the option to flag a story as "purposefully fake or deceitful news". According to Reuters, such content is "being spread like a wildfire" on the social media platform. Facebook maintained that "satirical" content, "intended to be humorous, or content that is clearly labeled as satire", will be taken into account and should not be intercepted. The algorithm, however, has been accused of maintaining a "filter bubble", where both material the user disagrees with and posts with a low level of likes, will also not be seen. In November 2015, Zuckerberg prolonged period of paternity leave from 4 weeks to 4 months.
On April 12, 2016, Zuckerberg revealed a decade-long plan for Facebook in a keynote address. His speech outlined his vision, which rested on three main pillars: artificial intelligence, increased connectivity around the world and virtual and augmented reality. In June 2016 Facebook announced Deep Text, a natural language processing AI which will learn user intent and context in 20 languages.
In July 2016, a US$1 billion lawsuit was filed against the company alleging that it permitted the Hamas group to use it to perform assaults that ended the lives of four people. Facebook released the blueprints of Surround 360 camera on GitHub under open-source license. In September 2016, it won an Emmy for its Visual animated short "Henry".
In October 2016, Facebook announced a fee-based communications tool called Workplace that aims to "connect everyone" while at work. Users can create profiles, see updates from co-workers on their news feed, stream live video and participate in secure group chats. Facebook annually has an Oculus Connect conference. Following the 2016 presidential election, Facebook announced that it would further combat the spread of fake news by using fact checkers from sites like FactCheck.org and Associated Press (AP), making reporting hoaxes easier through crowdsourcing, and disrupting financial incentives for spammers.
On January 17, 2017, Facebook COO Sheryl Sandberg planning to open Station F, a startup incubator campus in Paris, France. On a six-monthly cycle, Facebook will work with ten to 15 data-driven startups in the location to help them develop their businesses. On April 18, 2017, Facebook announced the beta launch of Facebook Spaces at Facebook's annual F8 developer conference in San Francisco. Facebook Spaces, a virtual reality app version of Facebook for the Facebook-owned Oculus VR goggles. In a virtual and shared space, users can access a curated selection of 360-degree photos and videos using their avatar, with the support of the controller. Users can also access their own photos and videos, and any media shared on their Facebook newsfeed. The beta app is currently available in the Oculus Store.
In September 2017, Facebook announced it would be spending up to US$1 billion on original shows for its Facebook Watch platform. On October 16, 2017, Facebook acquired the anonymous compliment social media app tbh for an undisclosed amount, announcing intentions to leave the app independent, similar to Instagram and WhatsApp. In May 2018, at its annual F8 developers conference in San Jose, California, Facebook announced it would make its own dating service. Shares in the dating business Match Group fell by 22% following the announcement.
Maps Facebook
Corporate affairs
Management
Facebook's key management personnel consists of Mark Zuckerberg (Chairman and Chief Executive Officer), Sheryl Sandberg (Chief Operating Officer), David Wehner (Chief Financial Officer), Mike Schroepfer (Chief Technology Officer), and Chris Cox (Chief Product Officer). As of June 30, 2017, Facebook has 20,658 employees.
Revenue
Most of Facebook's revenue comes from advertising. Facebook generally has a lower clickthrough rate (CTR) for advertisements than most major websites. According to BusinessWeek.com, banner advertisements on Facebook have generally received one-fifth the number of clicks compared to those on the Web as a whole, although specific comparisons can reveal a much larger disparity. For example, while Google users click on the first advertisement for search results an average of 8% of the time (80,000 clicks for every one million searches), Facebook's users click on advertisements an average of 0.04% of the time (400 clicks for every one million pages). Successful advertising campaigns on the site can have clickthrough rates as low as 0.05% to 0.04%, and CTR for ads tend to fall within two weeks.
The cause of Facebook's low CTR has been attributed to younger users enabling ad blocking software and their adeptness at ignoring advertising messages, as well as the site's primary purpose being social communication rather than content viewing. According to digital consultancy iStrategy Labs in mid-January 2014, three million fewer users aged between 13 and 17 years were present on Facebook's Social Advertising platform compared to 2011. However, Time writer and reporter Christopher Matthews stated in the wake of the iStrategy Labs results:
A big part of Facebook's pitch is that it has so much information about its users that it can more effectively target ads to those who will be responsive to the content. If Facebook can prove that theory to be true, then it may not worry so much about losing its cool cachet.
A portion of Facebook revenue comes from the "firehose" access, bulk access to the social media data sold to the third parties. In December 2014, a report from Frank N. Magid and Associates found that the percentage of teens aged 13 to 17 who used Facebook fell to 88% in 2014, down from 94% in 2013 and 95% in 2012. Zuckerberg, alongside other Facebook executives, have questioned the data in such reports; although, a former Facebook senior employee has commented: "Mark [Zuckerberg] is very willing to recognize the strengths in other products and the flaws in Facebook."
On pages for brands and products, however, some companies have reported CTR as high as 6.49% for Wall posts. A study found that, for video advertisements on Facebook, over 40% of users who viewed the videos viewed the entire video, while the industry average was 25% for in-banner video ads.
The company released its own set of revenue data at the end of January 2014 and claimed: Revenues of US$2.59 billion were generated for the three months ending December 31, 2013; earnings per share were 31 cents; revenues of US$7.87 billion were made for the entirety of 2013; and Facebook's annual profit for 2013 was US$1.5 billion. During the same time, independent market research firm eMarketer released data in which Facebook accounted for 5.7 per cent of all global digital ad revenues in 2013 (Google's share was 32.4 per cent). Revenue for the June 2014 quarter rose to $2.68 billion, an increase of 67 per cent over the second quarter of 2013. Mobile advertising revenue accounted for around 62 per cent of advertising revenue, an increase of approximately 41 per cent over the comparable quarter of the previous year. In December 2017, the company announced that it would no longer route all of its revenues through its Ireland headquarters, but rather record revenue locally in each of the countries where it is generated.
Number of advertisers
In February 2015, Facebook announced that it had reached two million active advertisers with most of the gain coming from small businesses. An active advertiser is an advertiser that has advertised on the Facebook platform in the last 28 days. In March 2016, Facebook announced that it reached three million active advertisers with more than 70% from outside the US.
Mergers and acquisitions
On November 15, 2010, Facebook announced it had acquired the domain name fb.com from the American Farm Bureau Federation for an undisclosed amount. On January 11, 2011, the Farm Bureau disclosed $8.5 million in "domain sales income", making the acquisition of FB.com one of the ten highest domain sales in history.
In February 2014, Facebook announced that it would be buying mobile messaging company WhatsApp for US$19 billion in cash and stock.
In November 2016 Facebook acquired CrowdTangle, a social analytics company that tracks how content spreads online. CrowdTangle confirmed the acquisition in a message at their website, but company didn't disclosed financial terms of the deal.
Offices
In early 2011, Facebook announced plans to move to its new headquarters, the former Sun Microsystems campus in Menlo Park. All users outside of the US and Canada have a contract with Facebook's Irish subsidiary "Facebook Ireland Limited". This allows Facebook to avoid US taxes for all users in Europe, Asia, Australia, Africa and South America. Facebook is making use of the Double Irish arrangement which allows it to pay just about 2-3% corporation tax on all international revenue. In 2010, Facebook opened its fourth office, in Hyderabad and the first in Asia.
Facebook, which in 2010 had more than 750 million active users globally including over 23 million in India, announced that its Hyderabad center would house online advertising and developer support teams and provide round-the-clock, multilingual support to the social networking site's users and advertisers globally. With this, Facebook joins other giants like Google, Microsoft, Oracle, Dell, IBM and Computer Associates that have already set up shop. In Hyderabad, it is registered as 'Facebook India Online Services Pvt Ltd'.
Though Facebook did not specify its India investment or hiring figures, it said recruitment had already begun for a director of operations and other key positions at Hyderabad, which would supplement its operations in California, Dublin in Ireland as well as at Austin, Texas. A custom-built data center with substantially reduced ("38% less") power consumption compared to existing Facebook data centers opened in April 2011 in Prineville, Oregon. In April 2012, Facebook opened a second data center in Forest City, North Carolina, US. In June 2013, Facebook opened a third data center in Luleå, Sweden. In November 2014, Facebook opened a fourth data center in Altoona, Iowa, US. In September 2016, Facebook announced a coming datacenter in Los Lunas, New Mexico in 2018 powered by renewable energy.
On October 1, 2012, CEO Zuckerberg visited Moscow to stimulate social media innovation in Russia and to boost Facebook's position in the Russian market. Russia's communications minister tweeted that Prime Minister Dmitry Medvedev urged the social media giant's founder to abandon plans to lure away Russian programmers and instead consider opening a research center in Moscow. Facebook has roughly 9 million users in Russia, while domestic analogue VK has around 34 million.
The establishment of a woodworking facility on the Menlo Park campus was announced at the end of August 2013. The facility, opened in June 2013, provides equipment, safety courses and a woodworking learning course. Employees are required to purchase materials at the in-house store. A Facebook spokesperson explained that the intention of setting up the facility is to encourage employees to think in an innovative manner because of the different environment; it also serves as an attractive perk for prospective employees. On November 21, 2016 Facebook announced that it will open its new London headquarters next year and create another 500 jobs in the UK. New headquarters will be in Fitzrovia in central London at a site that is currently undergoing redevelopment. Facebook's London-based executive, Nicola Mendelsohn said "The UK remains one of the best places to be a tech company". In August 2017, Facebook announced the opening of a new office in Cambridge, Massachusetts in 2018. Facebook will occupy the top three floors of 100 Binney St in Kendall Square and share the building with the pharmaceutical employees from Bristol-Myers Squibb. The offices will be home to Facebook's "Connectivity Lab", a group focused on bringing Internet access and technology to 4 billion people who do not have access to the Internet.
Tax affairs
Like Apple, Google and Microsoft (and other US technology multinationals), Facebook has an office in Ireland (Facebook Ireland), with circa 2,000 employees, through which it manages 1.9bn global Facebook accounts (86% of all Facebook accounts), representing all of its non-US accounts (i.e. not just European). Facebook Ireland is the 9th largest Irish company (by 2017 revenues, see here).
Facebook Ireland uses a basic double Irish tax structure to pay effective tax rates of <1% on the Irish business, which is a similar outcome for Apple and Google in Ireland.
Under pressure from the EU, the Irish Government closed the double Irish to new schemes in 2015, however, existing users, like Facebook, have until 2020 to find alternatives. On foot of their EU Commission EUR13bn tax fine (for period 2004-2014, the largest tax fine in history), Apple has restructured their double Irish structure (Apple Sales International), into an Irish capital allowances for intangibles tax scheme (see leprechaun economics). However Microsoft has opted for a variation of the double Irish called the single malt, which relies on specific wording in the Ireland-Malta tax treaty.
To create a double Irish tax structure, a large quantum of intellectual property (or "IP") must be owned in a low-tax location, which the double Irish will then charge out to all non-US locations as a royalty payment (to relocate profits to the low-tax location). The US IRS is challenging Facebook Inc. on the valuation it used when it transferred IP from the US to Facebook Ireland in 2010 (which Facebook Ireland then revalued higher before charging out), as it was building it's double Irish. The case is ongoing and the IRS have noted that the potential quantum of fine is $3-5bn.
The US Tax Cuts and Jobs Act of 2017 changes Facebook's global tax calculations. Facebook Ireland will now be subject to the US GILTI tax of 10.5% on global intangible profits (i.e. Irish profits). On the basis that Facebook Ireland is paying some tax, the effective minimum US tax for Facebook Ireland will be circa 11%. In contrast, Facebook Inc. would incur a special IP tax rate of 13.125% (the FDII rate) if it's Irish business was relocated back to the US. Higher tax relief in the US (21% vs. Irish at the GILTI rate) and accelerated capital expensing, would make this effective US rate circa 12%.
The closeness of the net effective tax costs of having Facebook Ireland, in Ireland, or relocated back to the US, was shown when Reuters revealed that Facebook Ireland is going to move 1.5bn non-EU accounts back to the US to limit exposure to the EU Commission's May 2018 GDPR. To irrevocably limit financial exposure to the EU's GDPR, these 1.5bn non-EU accounts (and their commercial processing) must be moved to the US. Facebook said that this move "did not carry tax implications", a statement which was mistakenly interpreted as implying that processing would stay in Ireland.
Website
Technical aspects
The website's primary color is blue as Zuckerberg is red-green colorblind, a realization that occurred after a test undertaken around 2007; he explained in 2010: "blue is the richest color for me--I can see all of blue." Facebook is built in PHP which is compiled with HipHop for PHP, a "source code transformer" built by Facebook engineers that turns PHP into C++. The deployment of HipHop reportedly reduced average CPU consumption on Facebook servers by 50%.
Facebook is developed as one monolithic application. According to an interview in 2012 with Chuck Rossi, a build engineer at Facebook, Facebook compiles into a 1.5 GB binary blob which is then distributed to the servers using a custom BitTorrent-based release system. Rossi stated that it takes about 15 minutes to build and 15 minutes to release to the servers. The build and release process has zero downtime and new changes to Facebook are rolled out daily.
Facebook uses a combination platform based on HBase to store data across distributed machines. Using a tailing architecture, new events are stored in log files, and the logs are tailed. The system rolls these events up and writes them into storage. The user interface then pulls the data out and displays it to users. Facebook handles requests as AJAX behavior. These requests are written to a log file using Scribe (developed by Facebook).
Data is read from these log files using Ptail, an internally built tool to aggregate data from multiple Scribe stores. It tails the log files and pulls data out (thus the name). Ptail data are separated out into three streams so they can eventually be sent to their own clusters in different data centers (Plugin impression, News feed impressions, Actions (plugin + news feed)). Puma is used to manage periods of high data flow (Input/Output or IO). Data is processed in batches to lessen the number of times needed to read and write under high demand periods (A hot article will generate a lot of impressions and news feed impressions which will cause huge data skews). Batches are taken every 1.5 seconds, limited by memory used when creating a hash table.
After this, data is output in PHP format (compiled with HipHop for PHP). The backend is written in Java and Thrift is used as the messaging format so PHP programs can query Java services. Caching solutions are used to make the web pages display more quickly. The more and longer data is cached the less realtime it is. The data is then sent to MapReduce servers so it can be queried via Hive. This also serves as a backup plan as the data can be recovered from Hive. Raw logs are removed after a period of time.
On March 20, 2014, Facebook announced a new open-source programming language called Hack. Before public release, a large portion of Facebook was already running and "battle tested" using the new language.
Facebook uses the Momentum platform from Message Systems to deliver the enormous volume of emails it sends to its users every day.
History
On July 20, 2008, Facebook introduced "Facebook Beta", a significant redesign of its user interface on selected networks. The Mini-Feed and Wall were consolidated, profiles were separated into tabbed sections, and an effort was made to create a cleaner look. After initially giving users a choice to switch, Facebook began migrating all users to the new version starting in September 2008. On December 11, 2008, it was announced that Facebook was testing a simpler signup process.
User profile/personal timeline
Each registered user on Facebook gets their own personal profile that shows their posts and content. The format of individual user pages was revamped in September 2011 and became known as "Timeline", a chronological feed of a user's stories, including status updates, photos, interactions with apps, and events. The new layout also let users add a "cover photo", a large header image at the top of the Timeline. Along with the new layout, users were also given more privacy settings to control the content on the Timeline. In 2007, Facebook launched Facebook Pages for brands and celebrities to interact with their fanbase, with more 100,000 Pages launched in November. In June 2009, Facebook introduced a "Usernames" feature, allowing users to choose a unique nickname used in the URL for their personal profile, for easier sharing.
In February 2014, Facebook expanded the options for a user's gender setting, adding a custom input field that allows users to choose from a wide range of gender identities. Users can also set which set of gender-specific pronoun should be used in reference to them throughout the site. In May 2014, Facebook introduced a feature to allow users to ask for information not disclosed by other users on their profiles. If a user does not provide key information, such as location, hometown, or relationship status, other users can use a new "ask" button to send a message asking about that item to the user in a single click.
News Feed
On September 6, 2006, News Feed was announced, which appears on every user's homepage and highlights information including profile changes, upcoming events, and birthdays of the user's friends. This enabled spammers and other users to manipulate these features by creating illegitimate events or posting fake birthdays to attract attention to their profile or cause. Initially, the News Feed caused dissatisfaction among Facebook users; some complained it was too cluttered and full of undesired information, others were concerned that it made it too easy for others to track individual activities (such as relationship status changes, events, and conversations with other users). In response, Zuckerberg issued an apology for the site's failure to include appropriate customizable privacy features. Since then, users have been able to control what types of information are shared automatically with friends. Users are now able to prevent user-set categories of friends from seeing updates about certain types of activities, including profile changes, Wall posts, and newly added friends.
On February 23, 2010, Facebook was granted a patent on certain aspects of its News Feed. The patent covers News Feeds in which links are provided so that one user can participate in the same activity of another user. The patent may encourage Facebook to pursue action against websites that violate its patent, which may potentially include websites such as Twitter. One of the most popular applications on Facebook is the Photos application, where users can upload albums and photos. Facebook allows users to upload an unlimited number of photos, compared with other image hosting services such as Photobucket and Flickr, which apply limits to the number of photos that a user is allowed to upload. During the first years, Facebook users were limited to 60 photos per album. As of May 2009, this limit has been increased to 200 photos per album.
Privacy settings can be set for individual albums, limiting the groups of users that can see an album. For example, the privacy of an album can be set so that only the user's friends can see the album, while the privacy of another album can be set so that all Facebook users can see it. Another feature of the Photos application is the ability to "tag", or label, users in a photo. For instance, if a photo contains a user's friend, then the user can tag the friend in the photo. This sends a notification to the friend that she has been tagged, and provides a link to see the photo. On June 7, 2012, Facebook launched its App Center to its users. It will help the users in finding games and other applications with ease. Since the launch of the App Center, Facebook has seen 150M monthly users with 2.4 times the installation of apps. The sorting and display of stories in a user's News Feed is governed by the EdgeRank algorithm.
On May 13, 2015, Facebook in association with major news portals launched a program "Instant Articles" to provide rich news experience. Instant articles provides users, access to articles on Facebook news feed without leaving the site. According to the technology news web site Gizmodo on May 9, 2016, Facebook curators routinely suppress or promote news that is deemed to meet a political agenda. For example, articles about Black Lives Matter would be listed even if they did not meet the trending criteria of News Feed. Likewise positive news about conservative political figures were regularly excised from Facebook pages. In January 2017, Facebook launched Facebook Stories for iOS and Android in Ireland. The feature, following the format of Snapchat and Instagram stories, allows users to upload photos and videos that appear above friends' and followers' News Feeds and disappear after 24 hours.
On October 11, 2017, Facebook introduced the 3D Posts feature to allow for uploading interactive 3D assets in the News Feed. On January 11, 2018, Facebook announced that it would be changing its News Feed algorithm to prioritize what friends and family share and de-emphasize content from media companies. The change was intended to maximize the "meaningful interactions" that people have with content on Facebook.
The "like" button, stylized as a "thumbs up" icon, was first enabled on February 9, 2009, and enables users to easily interact with status updates, comments, photos and videos, links shared by friends, and advertisements. Once clicked by a user, the designated content appears in the News Feeds of that user's friends, and the button also displays the number of other users who have liked the content, including a full or partial list of those users. The like button was extended to comments in June 2010. After extensive testing and years of questions from the public about whether it had an intention to incorporate a "Dislike" button, Facebook officially rolled out "Reactions" to users worldwide on February 24, 2016, letting users long-press on the like button for an option to use one of five pre-defined emotions, including "Love", "Haha", "Wow", "Sad", or "Angry". Reactions were also extended to comments in May 2017.
Instant messaging
Facebook Messenger is an instant messaging service and software application. Originally developed as Facebook Chat in 2008, the company revamped its messaging service in 2010, and subsequently released standalone iOS and Android apps in August 2011. Over the years, Facebook has released new apps on a variety of different operating systems, launched a dedicated website interface, and separated the messaging functionality from the main Facebook app, requiring users to download the standalone apps.
Facebook Messenger lets Facebook users send messages to each other. Complementing regular conversations, Messenger lets users make voice calls and video calls both in one-to-one interactions and in group conversations. Its Android app has integrated support for SMS and "Chat Heads", which are round profile photo icons appearing on-screen regardless of what app is open, while both apps support multiple accounts, conversations with optional end-to-end encryption, and playing "Instant Games", which are select games built into Messenger. Some features, including sending money and requesting transportation, are limited to the United States. In 2017, Facebook has added "Messenger Day", a feature that lets users share photos and videos in a story-format with all their friends with the content disappearing after 24 hours; Reactions, which lets users tap and hold a message to add a reaction through an emoji; and Mentions, which lets users in group conversations type @ to give a particular user a notification.
In March 2015, Facebook announced that it would start letting businesses and users interact through Messenger with features such as tracking purchases and receiving notifications, and interacting with customer service representatives. It also announced that third-party developers could integrate their apps into Messenger, letting users enter an app while inside Messenger and optionally share details from the app into a chat. In April 2016, it introduced an API for developers to build chatbots into Messenger, for uses such as news publishers building bots to give users news through the service, and in April 2017, it enabled the M virtual assistant for users in the U.S., which scans chats for keywords and suggests relevant actions, such as its payments system for users mentioning money. Additionally, Facebook expanded the use of bots, incorporating group chatbots into Messenger as "Chat Extensions", adding a "Discovery" tab for finding bots, and enabling special, branded QR codes that, when scanned, take the user to a specific bot.
Following
On September 14, 2011, Facebook added the ability for users to provide a "Subscribe" button on their page, which allows users to subscribe to public postings by the user without needing to add him or her as a friend. In conjunction, Facebook also introduced a system in February 2012 to verify the identity of certain accounts. In December 2012, Facebook announced that because of user confusion surrounding its function, the Subscribe button would be re-labeled as a "Follow" button--making it more similar to other social networks with similar functions.
Comparison with Myspace
The media often compares Facebook to Myspace, but one significant difference between the two Web sites is the level of customization. Another difference is Facebook's requirement that users give their true identity, a demand that MySpace does not make. MySpace allows users to decorate their profiles using HTML and Cascading Style Sheets (CSS), while Facebook allows only plain text. Facebook has a number of features with which users may interact. They include the Wall, a space on every user's profile page that allows friends to post messages for the user to see; Pokes, which allows users to send a virtual "poke" to each other (a notification then tells a user that he or she has been poked); Photos, that allows users to upload albums and photos; and Status, which allows users to inform their friends of their whereabouts and actions. Facebook also allows users to tag various people in photographs. Depending on privacy settings, anyone who can see a user's profile can also view that user's Wall. In July 2007, Facebook began allowing users to post attachments to the Wall, whereas the Wall was previously limited to textual content only. Facebook also differs from Myspace in the form of advertising used. Facebook uses advertising in the form of banner ads, referral marketing, and games. Myspace, on the other hand, uses Google and AdSense. There is also a difference in the userbase of each site. MySpace, initially, was much more popular with high school students, while Facebook was more popular among college students. A study by the American firm Nielsen Claritas showed that Facebook users are more inclined to use other professional networking sites, such as LinkedIn, than Myspace users.
Privacy
Facebook enables users to choose their own privacy settings and choose who can see specific parts of their profile. The website is free to its users and generates revenue from advertising, such as banner ads. Facebook requires a user's name and profile picture (if applicable) to be accessible by everyone. Users can control who sees other information they have shared, as well as who can find them in searches, through their privacy settings. On November 6, 2007, Facebook launched Facebook Beacon, which was a part of Facebook's advertisement system until it was discontinued in 2009. Its purpose was to allow targeted advertisements and allowing users to share their activities with their friends.
In 2010, Facebook's security team began expanding its efforts to reduce the risks to users' privacy, but privacy concerns remain. Since 2010, the US National Security Agency has been taking publicly posted profile information from Facebook, among other social media services, user profiles to discover who they interact with.
On November 29, 2011, Facebook settled Federal Trade Commission charges that it deceived consumers by failing to keep privacy promises. In August 2013 High-Tech Bridge published a study showing that links included in Facebook messaging service messages were being accessed by Facebook. In January 2014 two users filed a lawsuit against Facebook alleging that their privacy had been violated by this practice.
In April 2018, in the wake of the Cambridge Analytica data breach scandal, and refuting a report to the contrary by Reuters, Mark Zuckerberg announced that Facebook would implement additional privacy "controls and settings" worldwide. These settings were originally intended for deployment in Europe in order to comply with the European Union's General Data Protection Regulation (GDPR), which take effect in May. In the lead-up to its implementation, Facebook also changed its terms of service and privacy policy to specify that that users within the European Union are served by Facebook Ireland, Ltd., while users outside of the EU are served by Facebook Inc., which is subject to U.S. jurisdiction. Previously, all users outside of Canada and the United States were served by Facebook Ireland, Ltd., which would make an additional 1.5 billion users subject to EU law in their use of Facebook than legally needed.
In the aftermath of the breach, Facebook withdrew its opposition to the California Consumer Privacy Act. Facebook, Google, Comcast, AT&T and Verizon had previously donated $200,000 each to a $1 million fund dedicated to opposing of the ballot measure. The Committee to Protect California jobs, which opposed the ballot question and is sponsored by the California Chamber of Commerce told Ars Technica that ""Facebook has NOT dropped its opposition to the measure". According to the Committee Facebook "simply formally dropped their participation in the 'no' campaign."
Facebook Bug Bounty Program
On July 29, 2011, Facebook announced its Bug Bounty Program in which security researchers will be paid a minimum of $500 for reporting security holes on Facebook's website. Facebook's Whitehat page for security researchers says: "If you give us a reasonable time to respond to your report before making any information public and make a good faith effort to avoid privacy violations, destruction of data, and interruption or degradation of our service during your research, we will not bring any lawsuit against you or ask law enforcement to investigate you."
Facebook started paying researchers who find and report security bugs by issuing them custom branded "White Hat" debit cards that can be reloaded with funds each time the researchers discover new flaws. "Researchers who find bugs and security improvements are rare, and we value them and have to find ways to reward them," Ryan McGeehan, former manager of Facebook's security response team, told CNET in an interview. "Having this exclusive black card is another way to recognize them. They can show up at a conference and show this card and say 'I did special work for Facebook.'"
India, which has the second largest number of bug hunters in the world, tops the Facebook Bug Bounty Program with the largest number of valid bugs. "Researchers in Russia earned the highest amount per report in 2013, receiving an average of $3,961 for 38 bugs. India contributed the largest number of valid bugs at 136, with an average reward of $1,353. The U.S. reported 92 issues and averaged $2,272 in rewards. Brazil and the UK were third and fourth by volume, with 53 bugs and 40 bugs, respectively, and average rewards of $3,792 and $2,950", Facebook quoted in a post.
Reception
User growth
CEO Mark Zuckerberg announced in August 2008 that Facebook had passed 100 million registered users. This increased to 150 million "active" users in January 2009. Stan Schroeder of Mashable questioned how the measurement of "active" was made, though acknowledging that "it probably means that users who've just created an account which sits idle for a long period of time aren't included". The number of users continued to grow, reaching 250 million in July 2009, 300 million in September 2009, 400 million in February 2010, and 500 million in July 2010. According to the company's data at the July 2010 announcement, half of the site's membership used Facebook daily, for an average of 34 minutes, while 150 million users accessed the site by mobile. A company representative called the milestone a "quiet revolution."
Mark Zuckerberg announced to the media at the start of October 2012 that Facebook had passed the monthly active users mark of one billion. The company's data also revealed 600 million mobile users, 219 billion photo uploads, and 140 billion friend connections. This continued to grow, reaching 1.19 billion monthly active users in October 2013, 1.44 billion users in April 2015, of which 1.25 billion were mobile users, 1.71 billion users in July 2016, 1.94 billion users in March 2017, and ultimately 2 billion users in June 2017.
Early in 2015, it was reported that teenagers preferred competing web sites such as Instagram and Snapchat. The estimated number of teens leaving Facebook was a million per year.
In November 2015, after skepticism about the accuracy of its "monthly active users" measurement, Facebook changed its definition of an "active user", now defining it as a logged-in member who visits the Facebook site through the web browser or mobile app, or uses the Facebook Messenger app, in the last 30 days of the date of measurement. This excludes the use of third-party services with Facebook integration, which was previously counted.
Statistics
According to analytics firm comScore, Facebook is the leading social networking site based on monthly unique visitors, having overtaken main competitor MySpace in April 2008. comScore reported that Facebook attracted over 130 million unique visitors in May 2010, an increase of 8.6 million people. According to third-party web analytics providers, Alexa and SimilarWeb, Facebook is ranked second and first globally respectively, it is the highest-read social network on the Web, with over 20 billion visitors per month, as of 2015. SimilarWeb, Quantcast, and Compete.com all rank the website 2nd in the U.S. in traffic. The website is the most popular for uploading photos, cumulatively with 50 billion uploaded. In 2010, Sophos's "Security Threat Report 2010" polled over 500 firms, 60% of which responded that they believed Facebook was the social network that "posed the biggest threat to security", well ahead of MySpace, Twitter, and LinkedIn.
Facebook is the most popular social networking site in several English-speaking countries, including Canada, the United Kingdom, and the United States. However, Facebook still receives limited adoption in countries such as Japan, where domestically created social networks are still largely preferred. In regional Internet markets, penetration on Facebook is highest in North America (69 percent), followed by Middle East-Africa (67 percent), Latin America (58 percent), Europe (57 percent), and Asia-Pacific (17 percent). Some of the top competitors were listed in 2007 by Mashable.
Awards and recognition
The website has won awards such as placement into the "Top 100 Classic Websites" by PC Magazine in 2007, and winning the "People's Voice Award" from the Webby Awards in 2008. In a 2006 study conducted by Student Monitor, a company specializing in research concerning the college student market, Facebook was named the "second most popular thing among undergraduates," tied with beer and only ranked lower than the iPod.
In 2010, Facebook won the Crunchie "Best Overall Startup Or Product" award for the third year in a row. However, in a July 2010 survey performed by the American Customer Satisfaction Index, Facebook received a score of 64 out of 100, placing it in the bottom 5% of all private-sector companies in terms of customer satisfaction, alongside industries such as the IRS e-file system, airlines, and cable companies. The reasons why Facebook scored so poorly include privacy problems, frequent changes to the website's interface, the results returned by the News Feed, and spam.
In December 2008, the Supreme Court of the Australian Capital Territory ruled that Facebook is a valid protocol to serve court notices to defendants. It is believed to be the world's first legal judgement that defines a summons posted on Facebook as legally binding. In March 2009, the New Zealand High Court associate justice David Gendall allowed for the serving of legal papers on Craig Axe by the company Axe Market Garden via Facebook. Employers have also used Facebook as a means to keep tabs on their employees and have even been known to fire them over posts they have made.
By 2005, the use of Facebook had already become so ubiquitous that the generic verb "facebooking" had come into use to describe the process of browsing others' profiles or updating one's own. In 2008, Collins English Dictionary declared "Facebook" as its new Word of the Year. In December 2009, the New Oxford American Dictionary declared its word of the year to be the verb "unfriend", defined as "To remove someone as a 'friend' on a social networking site such as Facebook".
Criticisms and controversies
Facebook's market dominance has led to international media coverage and significant reporting of its shortcomings. Notable issues include Internet privacy, such as its widespread use of a "like" button on third-party websites tracking users, possible indefinite records of user information, automatic facial recognition software, and its role in the workplace, including employer-employee account disclosure. In a 2014 Huffington Post blog article entitled "Facebook: The World's Biggest Waste of Time?", Bill Robinson stated that going on Facebook was not a productive use of time and he raised concerns about its addictive qualities. Timothy A Pychyl wrote in Psychology Today about his concerns that Facebook is leading to "technological time wasting" and procrastination.
The use of Facebook can have psychological effects, including feelings of jealousy and stress, a lack of attention, and social media addiction, in some cases comparable to drug addiction.
Facebook's company tactics have also received prominent coverage, including electricity usage, tax avoidance, real-name user requirement policies, censorship, and its involvement in the United States PRISM surveillance program.
Due to allowing users to publish material by themselves, Facebook has come under scrutiny for the amount of freedom it gives users, including copyright and intellectual property infringement, hate speech, incitement of rape and terrorism, fake news, and crimes, murders and violent incidents live-streamed through its Facebook Live functionality.
Facebook worked on special censorship software so it could potentially accommodate censorship demands in Communist-controlled China.
The company has also been subject to multiple litigation cases over the years, with its most prominent case concerning allegations that CEO Mark Zuckerberg broke an oral contract with Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra to build the then-named "HarvardConnection" social network in 2004, instead allegedly opting to steal the idea and code to launch Facebook months before HarvardConnection began. The original lawsuit was eventually settled in 2009, with Facebook paying approximately $20 million in cash and 1.25 million shares. A new lawsuit in 2011 was dismissed.
On November 5, 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Russian state organizations with ties to Vladimir Putin pursued between 2009 and 2011 large investments in Facebook and Twitter via an intermediary--Russian-American entrepreneur Yuri Milner, who befriended Facebook founder Mark Zuckerberg and was a business associate of Jared Kushner, President Donald Trump's son-in-law. According to The Express Tribune, Facebook is among the corporations that "avoided billions of dollars in tax using offshore companies". A subsidiary of the Kremlin-controlled Gazprom funded an investment company that partnered with DST Global, an investment firm part of Mail.ru, to buy shares in Facebook, reaping millions when the social media giant went public in 2012. Four days after the Facebook IPO, a DST Global subsidiary sold more than 27 million shares of Facebook for roughly $1 billion.
On March 6, 2018, BlackBerry sued Facebook and its Instagram and WhatsApp subdivision for ripping off key features of its messaging app. According to BlackBerry, it invented the core concepts in mobile messaging app which were copied by Facebook and its subsidiaries. According to the Facebook Deputy General Counsel, Paul Grewal, BlackBerry abandoned its effort to innovate and it is now looking to tax the innovation of others.
Shadow profiles
"Shadow profile" has become a catch all term for data that is outside the scope of a user's official profile or voluntarily shared content. This includes data that Facebook collects on non-users that may be collected by the Facebook analytics Pixel or location data from a mobile phone. During his 2018 Congressional testimony, CEO Mark Zuckerberg said that while users have control over data collection for advertising purposes, "On security, there may be specific things about how you use Facebook, even if you're not logged in, that we keep track of to make sure you're not abusing the systems." Zuckerberg also stated that he was not familiar with the term "shadow profile", though he did confirm that Facebook gathers data on individuals who have not signed up for Facebook accounts.
Cambridge Analytica
In March 2018, whistleblowers revealed that personal information from over 50 million Facebook users was sold to Cambridge Analytica, a political data analysis firm that had worked for Donald Trump's presidential campaign. The data was collected using an app created by Global Science Research. While approximately 270,000 people volunteered to use the app, Facebook's API also permitted data collection from the friends of app users. When the information was first reported Facebook tried to downplay the significance of the breach, and attempted to suggest that the stolen data was no longer available to Cambridge Analytica. However, with increasing scrutiny, Facebook issued a statement expressing alarm and suspended Cambridge Analytica, while review of documents and interviews with former Facebook employees suggested that Cambridge Analytica was still in possession of the data. This is a violation of the consent decree entered into law by Facebook with the Federal Trade Commission, and violations of the consent decree could carry a penalty of $40,000 per violation, meaning that if news reports that the data of 50 million people were shared proves true, the company's possible exposure runs into the trillions of dollars.
According to The Guardian reporter Carole Cadwalladr who broke the story, both Facebook and Cambridge Analytica threatened to sue the newspaper if it published the story and continually tried to prevent its publication. After the story was published anyway, Facebook claimed that it had been "lied to". Cadwalladr said that Facebook was trying to shift the blame onto a third party. Nick Thompson of Wired and CBS News pointed out that Cambridge Analytica obtained all the personal data without having to "breach" Facebook, and that "It didn't work because somebody hacked in and broke stuff, it worked because Facebook has built the craziest most invasive advertising model in the history of the world and someone took advantage of it." On March 23, 2018, The English High Court granted an application by the Information Commissioner's Office for a warrant to search Cambridge Analytica's London offices ending a standoff between Facebook's data team and the Information Commissioner over who is responsible for the forensic searching of the company's servers.
On March 25, Zuckerberg placed a newspaper ad in UK and US newspapers apologising over a "breach of trust"; newspapers included Sunday Telegraph, Sunday Times, Mail on Sunday, Observer, Sunday Mirror and Sunday Express.
You may have heard about a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I'm sorry we didn't do more at the time. We're now taking steps to make sure this doesn't happen again.
We've already stopped apps like this from getting so much information. Now we're limiting the data apps get when you sign in using Facebook.
We're also investigating every single app that had access to large amounts of data before we fixed this. We expect there are others. And when we find them, we will ban them and tell everyone affected.
Finally, we'll remind you which apps you've give access to your information - so you can shut off the ones you don't want anymore.
Thank you for believing in this community. I promise to do better for you.
On March 26, the Federal Trade Commission opened an investigation into Facebook regarding the use of its data by Cambridge Analytica, causing stocks to temporarily drop by more than 5 percent.
Public apologies
In early March 2018, a U.K.-based newspaper called The Observer reported that a "political consultancy" known as Cambridge Analytica had been provided access to the personal data of about 50 million Americans by Facebook. On March 21, 2018, Facebook founder Mark Zuckerberg issued the company's first public statement since this information was publicly disclosed. However, another article was published on April 4 by Wired that reports a statement made by Facebook regarding the number of people affected. Mike Schroepfer - Facebook's chief technology officer - disclosed that the amount is closer to 87 million via a blog post. The earlier announcement discussed modification to the way that "third-party applications" could access data from Facebook. An app downloaded by 270,000 people has been claimed to have led to the crisis. When users downloaded this app - called "thisisyourdigitallife" - information regarding the users' preferred Facebook content as well as their "home town" could then be accessed by the app. This was than used to acquire similar information of the user's contacts and continued to affect approximately 50 million people in total. It has also been claimed that pre-existing policies around access to personal information of Facebook users by "third-party app developers" are foundational to the "crisis". The company has received significant backlash following the disclosure of the use of private data by other entities. This backlash has also taken the form of demands for legal accountability, including the opening of an investigation into the company by the U.S. Federal Trade Commission. Others such as Elon Musk, who has deleted his Facebook pages for SpaceX and Tesla, have publicly expressed their decision to terminate their use of the media platform for their purposes.
According to a study done by Jeffery Child and Shawn Starcher in 2015, Facebook is a social media platform where "both known and unknown audiences can gain access to posted context, increasing the possibility for privacy breakdowns". The company has a history of making efforts of rapprochement for such privacy crises. Past apologies of Facebook started in 2009, when Facebook first launched their site worldwide. In the hopes of making it easier for users to share or keep their information private, the company ended up modifying the entire site and publicizing a subsequent apology for the situation. For years, Facebook has been giving advertisers the option of having targeted ads based on data collecting companies like Acxiom Corp and Experian PLC. In March 2016, Facebook first acknowledged that user data had been mishandled back in 2014 when a third-party app was linked back to Cambridge Analytica. This was the same company that was hired by the 2016 presidential campaign of Donald Trump. The media platform has also been accessed by individuals in addition to corporate entities for varying purposes. The site has been used to determine the eligibility for students to be employed or charged with a form of retribution in some cases, based on what they share or post.
In response to criticism and outrage, different media outlets were used by the company to issue a public apology. On March 25, 2018, U.K. newspapers The Observer, The Sunday Times, Mail on Sunday, Sunday Mirror, Sunday Express and Sunday Telegraph contained full-page ads depicting a personal apology from Facebook founder Mark Zuckerberg. In the United States, The New York Times, The Washington Post, and The Wall Street Journal also contained the same page-length ads. In addition to the use of newspaper outlets, Mark Zuckerberg issued a verbal apology on CNN. and took part in interviews with other news organizations such as Recode. Zuckerberg has also made multiple other apologies over the course of the years regarding Facebook. In May 2010, Zuckerberg issued a public apology over discrepancies in the privacy settings in The Washington Post via an Op-Ed article. Similarly, the CEO has also made apologies via blog posts as well as through the Facebook platform itself.
In an effort to earn back public trust, Facebook ended its partnerships with several data brokers who aid advertisers in targeting people on the social network. The company has also adjusted the privacy settings again for its user base as well. Previously, Facebook had its privacy settings spread out over 20 pages, and has now put all of its privacy settings on one page, which makes it harder for third-party apps to access the user's personal information. In addition to publicly apologizing, Facebook has said that it will be reviewing and auditing thousands of apps that display "suspicious activities" in an effort to ensure that this breach of privacy doesn't happen again. In a 2010 report regarding privacy, a research project stated that not a lot of information is available regarding the consequences of what people disclose online so often what is available are just reports made available through popular media. In 2017, a former Facebook executive went on the record to discuss how social media platforms have contributed to the unraveling of the "fabric of society".
Impact
Media impact
In April 2011, Facebook launched a new portal for marketers and creative agencies to help them develop brand promotions on Facebook. The company began its push by inviting a select group of British advertising leaders to meet Facebook's top executives at an "influencers' summit" in February 2010. Facebook has now been involved in campaigns for True Blood, American Idol, and Top Gear. News and media outlets such as The Washington Post, Financial Times and ABC News have used aggregated Facebook fan data to create various infographics and charts to accompany their articles. In 2012, beauty pageant Miss Sri Lanka Online was run exclusively using Facebook.
Economic impact
Facebook, Inc. has utilized growing internet markets using a social media platform to expand its user base while generating billions of dollars in revenue from Facebook's companies. Through empirical findings, economists have been able to identify key areas where Facebook has been able to stimulate economic activity by offering a free public good in that one user will not reduce the amount available to another, while also generating positive externalities. Thus, mobile phone manufactures and carriers have been beneficiaries of Facebook's spillover effect. Three distinct areas have been found to add the most economic impact: platform competition, the marketing place, and user behavior data.
Facebook's platform is efficient because it lowers barriers to entry and lowers costs for businesses to rapidly innovate new ideas. Scalability is accomplished with less wasted resources and monetized by collecting user behavior and usage data for targeted advertising. Facebook advertising allows firms to reasonably scale up operations to reach Facebook users. Facebook's daily active users have increased 18% year-over-year and burgeoning from 1 million users in 2004, to over 1.9 billion in 2017. Facebook is a leader among tech companies who continues to improve their carbon impact through more efficient data centers and clean renewable energy.
By the end of 2016, Facebook's total revenue earnings were $27.638 billion, gross profit was $23.849 billion and a net income for the year was $10.188 billion.
Facebook provides a development platform for many social gaming, communication, feedback, review, and other applications related to online activities. This open platform of Facebook has spawned many new businesses and added thousands of jobs to the economy. Zynga Inc., a leading company in social gaming app development, is an example of those businesses. An econometric analysis studied the impact of Facebook on the economy in terms of the number of jobs created and the economic value of those jobs. The conservative estimate was that the app development platform of Facebook added more than 182,000 jobs in the U.S. economy in 2011. The total economic value of the added employment was about $12 billion.
Social impact
Facebook has affected the social life and activity of people in various ways. Facebook allows people using computers or mobile phones to continuously stay in touch with friends, relatives and other acquaintances wherever they are in the world, as long as there is access to the Internet. It has reunited lost family members and friends. It allows users to trade ideas, stay informed with local or global developments, and unite people with common interests and/or beliefs through open, closed and private groups and other pages.
Facebook's social impact has also changed how people communicate. Rather than having to reply to others through email, Facebook allows users to broadcast or share content to others, and thereby to engage others or be engaged with others' posts.
Facebook has been successful and more socially impactful than many other social media sites. David Kirkpatrick, technology journalist and author of The Facebook Effect, believes that Facebook is structured in a way that is not easily replaceable. He challenges users to consider how difficult it would be to move all the relationships and photos to an alternative. Facebook has let people participate in an atmosphere with the "over the backyard fence quality" of a small town, despite the move to larger cities. As per Pew Research Center survey, 44 percent of the overall US population gets news through Facebook.
Emotional health impact
Facebook, and social media in general, has received significant media coverage for negative emotional health impacts. Studies have shown that Facebook causes negative effects on self-esteem by triggering feelings of envy, with vacation and holiday photos proving to be the largest resentment triggers. Other prevalent causes of envy include posts by friends about family happiness and images of physical beauty--such envious feelings leave people lonely and dissatisfied with their own lives. A joint study by two German universities discovered that one out of three people were more dissatisfied with their lives after visiting Facebook, and another study by Utah Valley University found that college students felt worse about their own lives following an increase in the amount of time spent on Facebook.
In a presentation by California State University psychology professor Larry D. Rosen, he notes that teenagers using Facebook exhibit more narcissistic tendencies, while young adults show signs of antisocial behavior, mania, and aggressiveness. However, he also found positive effects from Facebook use, including signs of "virtual empathy" towards online friends and helping introverted persons learn social skills. He said that "While nobody can deny that Facebook has altered the landscape of social interaction, particularly among young people, we are just now starting to see solid psychological research demonstrating both the positives and the negatives".
In a blog post in December 2017, the company pointed to research that has shown "passively consuming" the News Feed, as in reading but not interacting, does indeed leave users with negative feelings afterwards, whereas interacting with messages points to improvements in well-being. TechCrunch noted that CEO Mark Zuckerberg had said in a recent earnings call that "Time spent is not a goal by itself. We want the time people spend on Facebook to encourage meaningful social interactions".
Political impact
In February 2008, a Facebook group called "One Million Voices Against FARC" organized an event in which hundreds of thousands of Colombians marched in protest against the Revolutionary Armed Forces of Colombia, better known as the FARC (from the group's Spanish name). In August 2010, one of North Korea's official government websites and the official news agency of the country, Uriminzokkiri, joined Facebook.
During the Arab Spring many journalists made claims that Facebook played a major role in generating the 2011 Egyptian revolution. On January 14, the Facebook page of "We are all khaled Said" was started by Wael Ghoniem Create Event to invite the Egyptian people to "peaceful demonstrations" on January 25. According to Mashable, in Tunisia and Egypt, Facebook became the primary tool for connecting all protesters and led the Egyptian government of Prime Minister Nazif to ban Facebook, Twitter and another websites on January 26 then ban all mobile and Internet connections for all of Egypt at midnight January 28. After 18 days, the uprising forced President Mubarak to resign.
In Bahrain uprising which started on February 14, 2011, Facebook was utilized by the Bahraini regime as well as regime loyalists to identify, capture and prosecute citizens involved in the protests. A 20-year-old woman named Ayat Al Qurmezi was identified as a protester using Facebook, taken from her home by masked commandos and put in prison.
In 2011, Facebook filed paperwork with the Federal Election Commission to form a political action committee under the name FB PAC. In an email to The Hill, a spokesman for Facebook said "Facebook Political Action Committee will give our employees a way to make their voice heard in the political process by supporting candidates who share our goals of promoting the value of innovation to our economy while giving people the power to share and make the world more open and connected."
During the Syrian civil war, the YPG, a libertarian army for Rojava has recruited westerners through Facebook in its fight against ISIL. Dozens have joined its ranks for various reasons from religious to ideological. The Facebook page's name "The Lions of Rojava" comes from a Kurdish saying which translates as "A lion is a lion, whether it's a female or a male", reflecting the organization's feminist ideology.
United States
Facebook's role in the American political process was demonstrated in January 2008, shortly before the New Hampshire primary, when Facebook teamed up with ABC and Saint Anselm College to allow users to give live feedback about the "back to back" January 5 Republican and Democratic debates. Facebook users took part in debate groups on specific topics, voter registration, and message questions.
Over a million people installed the Facebook application "US Politics on Facebook" in order to take part, and the application measured users' responses to specific comments made by the debating candidates. This debate showed the broader community what many young students had already experienced: Facebook as a popular and powerful new way to interact and voice opinions. A poll by CBS News, UWIRE and The Chronicle of Higher Education claimed to illustrate how the "Facebook effect" has affected youth voting rates, support by youth of political candidates, and general involvement by the youth population in the 2008 election.
The new social media, such as Facebook and Twitter, made use first of the personal computer and the Internet, and after 2010 of the smart phones to connect hundreds of millions of people, especially those under age 35. By 2008, politicians and interest groups were experimenting with systematic use of social media to spread their message among much larger audiences than they had previously reached.
Facebook is having an impact on local government as well. Justin Smith, a Colorado sheriff uses Facebook to disseminate his ideas on matters relating to local, state, and national concerns. He also publicizes crimes, particularly those that his department solves. He has seven thousand followers on the social medium, considered a large number. Smith said that he rarely goes out in public "when I don't get feedback from folks. ... Facebook is an interesting tool because I think it holds candidates and elected officials more accountable. Voters know where someone stands."
According to the Investor's Business Daily, "In 2012, the Obama campaign encouraged supporters to download an Obama 2012 Facebook app that, when activated, let the campaign collect Facebook data both on users and their friends." Carol Davidsen, the Obama for America (OFA) former director of integration and media analytics, wrote that "Facebook was surprised we were able to suck out the whole social graph, but they didn't stop us once they realised that was what we were doing."
As American political strategists turn their attention to the 2016 presidential contest, they identify Facebook as an increasingly important advertising tool. Recent technical innovations have made possible more advanced divisions and subdivisions of the electorate. Most important, Facebook can now deliver video ads to small, highly targeted subsets. Television, by contrast, shows the same commercials to all viewers, and so cannot be precisely tailored.
2016 United States elections
A Russian company bought more than $100,000 worth of Facebook ads during the 2016 presidential election. Special Council Robert Mueller, contacted Facebook subsequently to the company's disclosure that it sold ads to a Russian Spy Agency-linked company (Internet Research Agency), and the Menlo Park-based company has pledged full cooperation in Mueller's investigation, and began with providing all information about the advertisement buys by the Russian government, including the identities of the individuals and companies who made the purchases. The Daily Beast reports that Russia Used Facebook Events to Organize Anti-Immigrant Rallies on U.S. Soil. Facebook has concluded that a 225,000-member anti-immigrant group that attempted to organize anti-Clinton rallies in Texas during the 2016 presidential campaign was "likely operated out of Russia", Business Insider reports. Russians also staged anti-Trump rallies in November 2016 and bought a Black Lives Matter Facebook ad during the 2016 campaign. Pro-Publica also reported on how Facebook Enabled Advertisers to Reach 'Jew Haters.' Facebook enabled advertisers to direct their pitches to the news feeds of almost 2,300 people who expressed interest in the topics of "Jew hater," "How to burn jews," or, "History of 'why jews ruin the world.'"
As of mid-September 2017 Facebook still does not know the extent of Russia's advertisement purchases during the 2016 election -- or whether these unidentified ad buys are still on the site. A Facebook spokesman told CNN that there was "no sales support". A company representative would not elaborate when asked by Business Insider if it plans to change its ad sales policy.
The Wall Street Journal reports that Facebook shared copies of ads and account information related to the Russian ad purchases on its platform with Robert Mueller that go beyond what it shared with Congress last week. Facebook's unusual compliance was in response to Search Warrants issued by Mueller's Federal Grand Jury. The Financial Times reports that United States Senate Intelligence committee seeks further information about Russia links with Facebook, and are stepping up the pressure on Facebook as concerns rise about the role the social media network played in Russia's interference in the 2016 presidential election. CNN reports that Facebook handed Russia-linked ads over to Mueller under search warrant.
Congressional Committees have said Facebook is withholding key information that could illuminate the shape and extent of a Russian propaganda campaign aimed at tilting the U.S. presidential election. The Financial Times reports US lawmakers with access to sensitive intelligence have expressed fears that Russia's campaign to influence US politics via Facebook is continuing today even as American investigators probe Moscow's use of social media in the 2016 election.
"Being Patriotic", a Facebook group uncovered by The Daily Beast, is the first evidence of suspected Russian provocateurs explicitly mobilizing Trump supporters in real life. The Washington Post reports Russian operatives used Facebook ads to exploit divisions over black political activism and Muslims. The Russians took advantage of Facebook's ability to simultaneously send contrary messages to different groups of users based on their political and demographic characteristics and also sought to sow discord among religious groups. Other ads highlighted support for Democrat Hillary Clinton among Muslim women. The ads suggest that Russian operatives worked off of evolving lists of racial, religious, political and economic themes. They used these to create pages, write posts and craft ads that would appear in users' news feeds--with the apparent goal of appealing to one audience and alienating another. Mark Zuckerberg responds to Trump, regrets he dismissed election concerns. The Daily Beast reports Russians Impersonated Real American Muslims to Stir Chaos on Facebook and Instagram. The Daily Beast reports that Mark Zuckerberg Blew Off Russian Troll Warnings Before the Attack on America.
On November 5, 2017, The New York Times reported that Russian-American Billionaire Yuri Milner, who befriended Facebook founder Mark Zuckerberg had between 2009 and 2011 strong Kremlin backing for his investments in Facebook and Twitter.
On March 17, 2018, The New York Times and The Observer of London reported the Facebook and Cambridge Analytica data breach in which Cambridge Analytica collected personal information from Facebook users as a basis of crafting political campaigns for whomever purchased their services. As a result, Facebook banned Cambridge Analytica from advertising on its platform. The Guardian reported further that Facebook has known about this security breach for two years, but has done nothing to protect its users.
Bans and censorship
In many countries the social networking sites and mobile apps have been blocked temporarily or permanently, including China, Iran, and North Korea. Facebook has been banned by Syria, China, and Iran.
Scientific impact
In January 2018, Facebook launched a new unit of time, the flick, equivalent to 1/705600000 of a second, exactly.
In popular culture
- Author Ben Mezrich published a book in July 2009 about Zuckerberg and the founding of Facebook, titled The Accidental Billionaires: The Founding of Facebook, A Tale of Sex, Money, Genius, and Betrayal.
- In 2009, My Facebook song from Gigi was released in Indonesia. The song is in Indonesian, telling about a guy that met his ex-girlfriend via Facebook. This song soon became popular in Indonesia, having high airplay on radio stations.
- The Social Network, a drama film directed by David Fincher and adapted from Mezrich's book, was released October 1, 2010. The film is a fictional re-telling of the creation of Facebook, and the legal battles associated with it. People portrayed in the movie, including Zuckerberg, criticized its accuracy.
- In response to the Everybody Draw Mohammed Day controversy and the banning of the website in Pakistan, an Islamic version of the website was created, called MillatFacebook.
- The site was parodied in "You Have 0 Friends", an April 2010 episode of the American animated comedy series South Park.
- In July 2014, after Shakira became the first celebrity to cross over 100 million likes, Mark Zuckerberg posted a congratulatory message on the artist's wall. Cristiano Ronaldo is the second to reach 100 million likes, ahead of Rihanna and Eminem, who had 98 million and 89 million likes respectively. On March 15, 2015, Cristiano Ronaldo surpassed Shakira to become the most liked person on Facebook.
See also
References
Further reading
- Arrington, Michael (April 25, 2010). "The Age of Facebook". TechCrunch. Retrieved March 23, 2017.
- Kirkpatrick, David (October 6, 2006). "Why Facebook matters: It's not just for arranging dates. And it's not just another social network. Facebook offers sophisticated tools for maintaining social relationships". Fortune. Retrieved April 9, 2017.
- Lee, Newton (2014). Facebook Nation: Total Information Awareness (2nd ed.). Springer Science+Business Media. ISBN 978-1-4939-1739-6.
- Miller, Daniel (2011). Tales from Facebook. Polity. ISBN 978-0-7456-5209-2.
- Muffett, Alec (October 31, 2014). "Making Connections to Facebook More Secure". Facebook. Retrieved December 13, 2016.
- Schroeder, Stan (February 7, 2011). "Facebook Privacy: 10 Settings Every User Needs to Know". Mashable. Retrieved February 1, 2015.
External links
- Official website (Mobile)
- Facebook companies grouped at OpenCorporates
- Facebook Inc's 10-K filed in 2017, listing business "risk factors"
Source of the article : Wikipedia
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