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18 Part 1 Introduction

develop Facebook when they originally contracted him Paul S. Madera, Meritech’s managing director, said his
to help in building their site. firm was impressed by Facebook’s rapid growth and its
It is also alleged that another system predated potential for further expansion in the coveted college-
Facebook. Aaron J. Greenspan, a Harvard student, in age market. ‘They’ve been designated by their com-
2003 created a simple web service that he called munity as the chosen community portal,’ Madera said.
houseSYSTEM. It was used by several thousand ‘This is a company that the entire venture community
Harvard students for a variety of online college-related would love to be a part of.’
tasks – six months before Facebook started and eight In October 2007 Microsoft took a $240 million equity
months before ConnectU went online. Mark Zuckerberg stake in Facebook. This stake was based on a $15
was briefly an early participant. No suit has been filed by billion valuation of Facebook. Under the terms of this
Greenspan, instead he has published a book about his strategic alliance, Microsoft would be the exclusive
experience. This service later expanded to include any third-party advertising platform partner for Facebook,
university student, then high school students, and even- and begin to sell advertising for Facebook internation-
tually to anyone aged 13 and over. ally in addition to the United States.

Brand identify established – 23 August 2005 New feed functionality launched –
September 2006
In August, Facebook bought the domain name face-
book.com from the Aboutface Corporation for $200,000 New information feeds were launched in mid-2006 and
and dropped ‘the’ from its name. these show the challenges of balancing the benefit of
new functionality against disrupting existing user habits.
International expansion – 11 December Writing in the Facebook blog in September 2006
2005 Mark Zuckerberg said:

Throughout 2005, Facebook extended its reach into We’ve been getting a lot of feedback about Mini-Feed
different types of colleges and by the end of 2005 and News Feed. We think they are great products, but
included most small universities and junior colleges in we know that many of you are not immediate fans,
the United States, Canada and Mexico. It was also made and have found them overwhelming and cluttered.
available in many universities in the UK and Ireland and Other people are concerned that non-friends can
by December, Australia and New Zealand were added to see too much about them. We are listening to all your
the Facebook network, bringing its size to more than suggestions about how to improve the product; it’s
2000 colleges and over 25,000 high schools. brand new and still evolving.
Later, in an open letter on the blog dated 8 September
Initial concerns about privacy of member 2006, Zuckerberg said:
data – 14 December 2005
We really messed this one up. When we launched
Two MIT students downloaded over 70,000 Facebook
News Feed and Mini-Feed we were trying to provide
profiles from four schools (MIT, NYU, the University of you with a stream of information about your social

Oklahoma, and Harvard) using an automated script, as world. Instead, we did a bad job of explaining what
part of a research project on Facebook privacy.
the new features were and an even worse job of
giving you control of them. I’d like to try to correct
Facebook receives $25 million in funding – those errors now.
April 2006; Microsoft invests October 2007
Categorizing friends into different types (Friends Lists –
In May 2005 Facebook received a $13 million cash infu-
December 2007) is one approach that has helped to
sion from venture firm Accel Partners, followed in April manage this.
2006 by a further $25 million from a range of partners
including Greylock Partners, Meritech Capital Partners, Facebook Platform for applications
and investor Peter Thiel, the co-founder of PayPal. launched – 24 May 2007
Facebook spokesman Chris R. Hughes explained the
rationale for the investment when he said: The Facebook Platform provides an API (Application
Programming Interface) which enables software devel-
This investment supports our goal to build an industry-
opers to create applications that interact with core
leading company that will continue to grow and evolve
Facebook features.
with our users. We’re committed to building the best
The Facebook developers resource (http://developers.
utility to enable people to share information with each
facebook.com) explains there are three main components
other in a secure and trusted environment.
used to build FB apps: