Facebook is an online social networking service, whose name stems from the colloquial name for the book given to students at the start of the academic year by some university administrations in the United States to help students get to know each other. It was founded in February 2004 by Mark Zuckerberg with his college roommates and fellow Harvard University students Eduardo Saverin,Andrew McCollum, Dustin Moskovitz and Chris Hughes. The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It gradually added support for students at various other universities before opening to high school students, and eventually to anyone aged 13 and over. Facebook now allows any users who declare themselves to be at least 13 years old to become registered users of the site.
Users must register before using the site, after which they may create a personal profile, add other users as friends, and exchange messages, including automatic notifications when they update their profile. Additionally, users may join common-interest user groups, organized by workplace, school or college, or other characteristics, and categorize their friends into lists such as "People From Work" or "Close Friends". As of September 2012, Facebook has over one billion active users, of which 8.7% are fake. According to a May 2011 Consumer Reports survey, there are 7.5 million children under 13 with accounts and 5 million under 10, violating the site's terms of service.
In May 2005, Accel partners invested $12.7 million in Facebook, and Jim Breyer added $1 million of his own money to the pot. A January 2009 Compete.com study ranked Facebook as 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?" Facebook eventually filed for an initial public offering on February 1, 2012, and was headquartered in Menlo Park, California. Facebook Inc. began selling stock to the public and trading on the NASDAQ on May 18, 2012. Based on its 2012 income of USD 5.1 Billion, Facebook joined theFortune 500 list for the first time, being placed at position of 462 on the list published in May 2013.
The ownership percentages of the company, As of 2012 are: Mark Zuckerberg: 28%, Accel Partners: 10%, Digital Sky Technologies: 10%, Dustin Moskovitz: 6%, Eduardo Saverin: 5%, Sean Parker: 4%, Peter Thiel: 3%, Greylock Partners and Meritech Capital Partners: between 1 to 2% each, Microsoft: 1.3%, Li Ka-shing: 0.8%, the Interpublic Group: less than 0.5%. A small group of current and former employees and celebrities own less than 1% each, including Matt Cohler, Jeff Rothschild, Adam D'Angelo, Chris Hughes, and Owen Van Natta, while Reid Hoffman and Mark Pincus have sizable holdings of the company. The remaining 30% or so are owned by employees, an undisclosed number of celebrities, and outside investors. Adam D'Angelo, former chief technology officer and friend of Zuckerberg, resigned in May 2008. Reports claimed that he and Zuckerberg began quarreling, and that he was no longer interested in partial ownership of the company.
Key management personnel comprise Chris Cox (VP of Product), Sheryl Sandberg (COO), and Mark Zuckerberg (Chairman and CEO). As of April 2011, Facebook has over 2,000 employees, and offices in 15 countries.[Other managers include chief financial officer David Ebersman and public relations head Elliot Schrage.
Most of Facebook's revenue comes from advertising
Facebook generally has a lower clickthrough rate (CTR) for advertisements than most major Web sites. 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).
Sarah Smith, who was Facebook's Online Sales Operations Manager, reports that successful advertising campaigns on the site can have clickthrough rates as low as 0.05% to 0.04%, and that CTR for ads tend to fall within two weeks. By comparison, the CTR for competing social network MySpace is about 0.1%, about 2.5 times better than Facebook's rate but still low compared to many other Web sites. The cause of Facebook's low CTR has been attributed to younger users enabling ad blocking software and being better at ignoring advertising messages, as well as the site being used more for the purpose of social communication as opposed to viewing content.
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.
According to comScore, Facebook is the leading social networking site based on monthly unique visitors, having overtaken main competitor MySpace in April 2008. ComScore reports that Facebook attracted 130 million unique visitors in May 2010, an increase of 8.6 million people. According to Alexa, the website's ranking among all websites increased from 60th to 7th in worldwide traffic, from September 2006 to September 2007, and is currently 2nd. Quantcast ranks the website 2nd in the U.S. in traffic, and Compete.com ranks it 2nd in the U.S. The website is the most popular for uploading photos, with 50 billion uploaded cumulatively. In 2010, Sophos's "Security Threat Report 2010" polled over 500 firms, 60% of which responded that they believed that 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. In regional Internet markets, Facebook penetration 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.
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 New Jersey-based 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.
On March 2010, Judge Richard Seeborg issued an order approving the class settlement in Lane v. Facebook, Inc., the class action lawsuit arising out of Facebook's Beacon program.
In 2010, Facebook won the Crunchie "Best Overall Startup Or Product" for the third year in a row and was recognized as one of the "Hottest Silicon Valley Companies" by Lead411. 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 (such as Virgin Atlantic Airways) 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. As in, 'I decided to unfriend my roommate on Facebook after we had a fight.'"
In early 2010, Openbook was established, an avowed parody (and privacy advocacy) website that enables text-based searches of those Wall posts that are available to "Everyone", i.e. to everyone on the Internet.
Writers for The Wall Street Journal found in 2010 that Facebook apps were transmitting identifying information to "dozens of advertising and Internet tracking companies". The apps used an HTTP referrer which exposed the user's identity and sometimes their friends'. Facebook said, "We have taken immediate action to disable all applications that violate our terms".
In January 2013, the countries with the most Facebook users were:
United States with 168.8 million members
Brazil with 64.6 million members
India with 62.6 million members
Indonesia with 51.4 million members
Mexico with 40.2 million members
All of the above total 309 million members or about 38.6 percent of Facebook's 1 billion worldwide members.
In regards to Facebook's mobile usage, per an analyst report in early 2013, there are 192 million Android users, 147 million iPhone users, 48 million iPad users and 56 million messenger users, and a total of 604 million mobile Facebook users.
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