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The Social Network of

Facebook
FACEBOOK, THE WORLD’S LARGEST SOCIAL NETWORK, announced in July
2010 that it had 500 million users around the world. The company has grown at a mete-
oric pace, doubling in size since 2009 and pushing international competitors aside. Its
policies, more than those of any other company, are helping to define standards for pri-
vacy in the Internet age.

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HE COMPANY, FOUNDED IN 2004 by a
Harvard sophomore, Mark Zuckerberg, began
life catering first to Harvard students and then
to all high school and college students. It has
since evolved into a broadly popular online
destination used by both teenagers and adults
of all ages. In country after country, Facebook
is cementing itself as the leader and often displacing other
social networks, much as it outflanked MySpace in the United
States.
But it has also come to be seen as one of the new titans of the
Internet, challenging even Google with a vision of a web tied
together through personal relationships and recommenda-
tions, rather than by search algorithms. In a major expansion,
Facebook has spread itself across other websites by offering
members the chance to “Like’’ something -- share it with their
network -- without leaving the web page they’re on.
Facebook
new features or “social applications” on In addition to channeling all e-mails,
Facebook, from games to new music text messages and chats through a sin- Disputed Origins
and photo sharing tools, which had the gle point, Facebook Messages will offer

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effect of further turbo-charging activity users what Mr. Zuckerberg called a acebook’s rise has been marked
on the site. “social in-box” that will prioritize mes- by strings of controversies.
Facebook Messages is a bold move by sages from friends and close acquaint- Three other Harvard students
Facebook to expand from a social net- ances, potentially saving time. The maintain that they came up
work into a full-fledged communica- company faces a number of challenges, with the original idea and that Mr.

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N NOVEMBER 2010, MR. results by April 2012, setting the stage Like other social networks, Facebook
Zuckerberg introduced Facebook for a likely IPO. allows its users to create a profile page
Messages, a new unified messag- The company, based in Palo Alto, Calif., and forge online links with friends and
ing system that allows people to earned $355 million on $1.2 billion in acquaintances. It has distinguished itself
communicate with one another on the revenue during the first nine months of from rivals, partly by imposing a spartan
Web and on mobile phones regardless 2010, according to a document prepared design ethos and limiting how users can
of whether they are using e-mail, text by Goldman for potential investors. That change the appearance of their profile
messages or online chat services. is up from $220 million in earnings on pages. That has cut down on visual clut-
In January, 2011, Facebook raised $500 $770 million in sales in 2009. ter and threats like spam, which plague
million from Goldman Sachs and a rivals. It has decisively outstripped other
Russian investor in a deal that values
the company at $50 billion -- more
Facebook Messages networks that preceded it, like MySpace
and Friendster, becoming what many
than companies like eBay, Yahoo and is a bold move by analysts see as the “default platform’’
Time Warner. The stake by Goldman Facebook to expand of a new age of information organized
Sachs, considered one of Wall Street’s from a social net- around personal relationships.
savviest investors, signals the increas-
ing might of Facebook, which has
work into a full Facebook built its lead not only
through savvy design but rapid deploy-
already been bearing down on giants fledged communica- ment of features that allowed the con-
like Google. tions system. It could tent created by users to multiply the
Mr. Zuckerberg had sought to keep
close control over the company, spurn
help the company site’s appeal. In May 2007, Facebook
unveiled an initiative called Facebook
ing a $1 billion offer from Yahoo in chip away even more Platform, inviting third-party software tions system. It could help the company however, like managing spam, getting Zuckerberg, whom they had hired to
2006 and playing down the idea of a at Internet portals makers to create programs for the ser- chip away even more at Internet portals users to change ingrained habits and write code for the site, stole the idea to
stock offering. But in the wake of the
Goldman investment, Facebook said
like Google, Yahoo, vice and to make money on advertis-
ing alongside them. The announcement
like Google, Yahoo, MSN and AOL,
which have used e-mail as one of their
persuading some to entrust their confi-
dential e-mail to a company whose pri-
create Facebook. Facebook has denied
the allegations. A long-running lawsuit
that it will begin reporting its financial MSN and AOL stimulated the creation of hundreds of main draws with consumers. vacy practices have often drawn scrutiny. is pending. Another Harvard classmate,

22 Rolling Stone www.rollingstone.com February 13, 2011 February 13, 2011 Rolling Stone www.rollingstone.com 23
Facebook
the earth.” cerns, the company in May 2010 and was looking at ways to prevent rities and Exchange Commission has investment criteria. The $450 mil-
Facebook has strenuously, and Mr. unveiled a set of controls that he said this from happening again. begun an inquiry into the increasingly lion investment values the Web com-
Zuckerberg more quietly, asserted that would help people understand what hot private market for shares in Internet pany at $50 billion. After Goldman’s
the portrayal of the company’s found- they were sharing online, and with The Goldman Deal companies, including Facebook, Twit- deal, some industry experts cautioned
ing is fiction. And Mr. Zuckerberg whom. ter, the gaming site Zynga and LinkedIn, that Facebook’s growth would need

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disputed the characterization of him Facebook’s biggest mistake, Mr. Zuck- n January 2011, Facebook raised an online professional networking site. to accelerate rapidly over the next
in the film, though in a New Yorker erman said, had been in failing to $500 million from Goldman Some experts suggest the inquiry is couple of years to justify such a steep
magazine profile, he acknowledged notice that as Facebook added new Sachs and a Russian investor in a focused on whether certain companies price — a risk with many brand-
having indulged in a bit of sophomoric features and its privacy controls grew transaction that values the com- are improperly using the private market name technology upstarts.
arrogance. increasingly complicated, those con- pany at $50 billion. to get around public disclosure require-

Aaron Greenspan, claims that he cre- trols became effectively unusable for As part of its deal with Facebook, Gold- ments.
ated the underlying architecture for Privacy Concerns many people. man is expected to raise as much as $1.5 Before Goldman Sachs bought a stake
both companies, but has declined to In October 2010, Facebook acknowl- billion from investors for Facebook. in Facebook and started offering shares

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enter the legal battle. he back and forth between edged that some applications on The new money will give Facebook more to wealthy clients, a powerful investment
A movie about Facebook’s tumultu- Facebook and its users over its site, including the popular game firepower to steal away valuable employ- group within the firm turned down the
ous origins, “The Social Network,” privacy is gaining importance FarmVille, had improperly shared ees, develop new products and possibly chance to buy a piece of the social net-
offers up what A.O. Scott called “a as the company’s growth con- identifying information about users, pursue acquisitions — all without being working site.
creation story for the digital age and tinues unabated. Facebook’s policies, and in some cases their friends, with a publicly traded company. The invest- The unit’s chief, Richard A. Friedman,
something of a morality tale, one more than those of any other company, advertisers and Web tracking compa- ment may also allow earlier shareholders, a longtime Goldman partner, decided
driven by desire, marked by triumph, are helping to define standards for pri- nies. The company said it was talking including Facebook employees, to cash the Facebook deal was not suitable for
tainted by betrayal and inspired by vacy in the Internet age. to application developers about how out at least some of their stakes. his clients, in part owing to the high
the new gospel: the geek shall inherit Bowing to pressure over privacy con- they handled personal information, The new investment came as the Secu- valuation and to a mismatch with his

24 Rolling Stone www.rollingstone.com February 13, 2011 February 13, 2011 Rolling Stone www.rollingstone.com 25