FACEBOOK STANFORD GRADUATE SCHOOL OF BUSINESS MAY 22, 2008 By: Bryan Jones

Launched in February, 2004 Created by MARK ZUCKERBERG Started in dorm room at Harvard University Took 11 months to reach 1 million users Over I billion users in 2013 with 82% outside of the U.S. and Canada THE BEGINNING

Within 2 weeks two-thirds of Harvard was on Facebook Only available to those with.edu s Expanded to Yale, Columbia, and Stanford and later Dartmouth By June 2004, 30 colleges and 150,000 users That summer Zuckerberg and Moskovitz went to Silicon Valley to focus on the social network PICKING UP STEAM

SOCIAL GRAPH Ties In personal relationships of individuals on a social network

Social networks have been around since the late 1990’s Findmail – communication tool LinkedIn – business professionals Friendster- dating website July 2003 – Chris DeWolfe and Tom Anderson founded MySpace “An online community that lets you meet your friends’ friends” January Orkut launched, created by Turkish born Google software engineer. Prominent in Brazil SOCIAL NETWORKS

A COMPARISON MySpace Known as dating and music discovery site December 2004, raised $11 million from Redpoint Ventures Open forum – no defining divisions between various networks Some characteristics: Groups, Invitations, Events, Classifieds, Forums Facebook Started as on-line directory for students Network was limited to the colleges they attended Put members in charge of their own privacy settings Only friends and peers can see your profile

“The use of Facebook is definitely aided by friends and people around you using it. But I think that it’s a utility and something that people use in their daily lives to look people up and find information about them… In that way, maybe there’s some form of networking going on.” Mark Zuckerberg SOCIAL NETWORK?

Countries with most users United States million Brazil million India million Indonesia million Mexico million members 2013

First three months were ran by renting servers for $85 per month flurry of venture financing around social networking sites Sean Parker, co-founder of Napster, joins the team August 2004 – Peter Thiel, founder of PayPal, invested $500 thousand into Facebook May, 2005 – Accel Partners out of Palo Alto, invests $12.5 million at a reported $100 million valuation for the social network FINANCING

September 2005 – Facebook enters the U.S. high school markets Current college members were asked to invite high school friends to the website High school members reached 1 million users in only 7 months MySpace had already dominated the high school market at the time Privacy settings was a concern High school students feared college admission staffs were monitoring the site for screening purposes Some students left evidence of underage drinking and illegal drug use on the site GROWTH

Technology used to scan site for fake profiles Authorities warned caution to putting contact information on the site Facebook and Zuckerberg created search utility that was more useful the more the user revealed about themselves Facebook wanted to limit censorship to keep the flow of information freer SECURITY

April, 2006 – Facebook allows limited corporate networks to join the site Accenture, Amazon, Apple, EA, Gap, Intel, Intuit, Microsoft, Pepsi, PWC, Teach for America Global expansion – Targeted colleges outside the U.S. India - Indian Institute of Technology (IIT), Indian Institute of Management (IIM) German Universities High schools in Israel MORE GROWTH

August 2006 – MySpace had 55 million users vs. Facebook with only 7.5 million users MySpace was 5 th most popular website visited Friendster was loosing members and had only 1 million members compared to their 1.75 million in 2003 Google – Blogger and Google talk and video YAHOO! – del.icio.us, Flickr AOL instant messaging COMPETITION

Facebook measures two-thirds retention per day Other sites measure retention per month, 25% being good Facebook is strong with photos, having somewhere between 2-3 billion photos on their website RETENTION

September, 2006 – Facebook adds News Feeds and Mini Feeds Facebook users estimated at 9.5 million Notifications of friends shows up on main page Tens of thousands of Facebook users were unhappy about this change They felt it violated their privacy to have all their friends aware of their updates Hundreds of Facebook groups protested and a boycott was planned REVOLT

“Calm down. Keep breathing. We hear you” News Feed was not taken down but modifications were put in place to allow users control of went into News Feed ZUCKERBERG’S REACTION

September 26, 2006 – Facebook removes restrictions on registration Anyone can now become a member by joining a geographic network New privacy controls were added a week earlier Gave users more control of who could find and interact with them: blocking controls, hiding profiles and pictures, prevent messaging, poking and other operations OPEN TO THE PUBLIC

Facebook turns down offer after offer Friendster, Google, Viacom, MySpace, NewsCorp (now owns MySpace), NBC, AOL, Microsoft YAHOO! offers $1 billion for Facebook in September 2006 Zuckerberg and Thiel announced that Facebook was not for sale, December 2006 Focus was to continue growth NO THANK YOU

October 2006 – Social Bookmarking introduced in Facebook Users could share interests by posting to their profile or send to a friend January 2007 – launches Facebook mobile page Users can upload photos and notes via mobile devices February 2007 – Facebook introduces Virtual Gifts – small icons users can send to one another First one free, $1 per icon afterwards NEW FEATURES

May 2007 – Facebook has 24 million users 150,000 new users a day 6 th most visited website in the world Website attracts older demographics EXPANDING

ANNOUNCED MAY 24, 2007 OPEN TO ALL DEVELOPERS ENABLING THEM TO MAKE MONEY WITHIN THEIR PAGE AND LEGALLY In addition to Facebook’s six main applications; photos, events, groups, gifts, birthdays, marketplace, users can add and delete as many apps as independent developers could make Today F8 is a annual Facebook conference to discuss upcoming new products F8 PLATFORM

September 22, 2011 – Timeline is unveiled at the F8 conference in San Francisco TIMELINE

Since the launch of F8, developers were promised that their apps would have as much priority as original apps Facebook’s apps are not privileged Within months of launch, over 1,500 apps were created THE PLATFORM

Facebook filed for their initial public offering on February 1, 2012 Stock was valued at $38 per share, pricing the company at $104 billion Record for trading of IPO at 460 million shares traded Stock price dropped to half of IPO Since then it’s up 50% to $26.85 per share IPO

The majority of Facebook’s revenue comes from advertising Just like Google, Facebook is an advertising company Source: ZDNet REVENUE

Let’s say you change your profile to engaged, you will start seeing advertisements for wedding rings and dresses. If one of your interests is tennis, then tennis advertisements will start popping up on your timeline. Personalized advertising, same as Google or Amazon HOW DOES ADVERTISING WORK ON FACEBOOK?

Source: ZDNet

A. Payment from developers B. Virtual Icons C. Facebook credits D. Music downloads WHAT IS OTHER REVENUE?

A. Payment from developers C. Facebook credits Other = Payments and other fees (Facebook credits – 30%) WHAT IS OTHER REVENUE?

FACEBOOK LEADS IN MOBILE APPS Source: Comscore.com

Mafia Wars SurveyMonkey Words with Friends Spotify Draw Something Scramble with Friends ChefVille SongPop RSS Graffiti Pinterest – (Source: Powtoon) TOP TEN APPS OF 2012

TOP APP OF 2012?

Spotify – 24.4 million users per month TOP APP OF 2012?

Spotify – 24.4 million users per month ChefVille – 21.9 million users per month TOP APP OF 2012?

Spotify – 24.4 million users per month ChefVille – 21.9 million users per month Pinterest – 20.5 million users per month TOP APP OF 2012?

A. $9.5 billion B. $101 billion C. $65 Billion D. $250 Billion HOW MUCH IS FACEBOOK WORTH?

C. $65 Billion HOW MUCH IS FACEBOOK WORTH?

HOW MUCH IS MARK ZUCKERBERG WORTH?

$14 billion Annual salary of $1 per year

HOW MUCH IS MARK ZUCKERBERG WORTH? $14 billion Annual salary of $1 per year Is he worth it? Discussion

MOST POPULAR DEVELOPER FOR FACEBOOK APPS?

Zynga Bubble Safari Castleville Hidden Chronicles CityVille Empires and Aliens FarmVille Pioneer Trail Zynga Poker Words With Friends Mafia Wars MOST POPULAR DEVELOPER FOR FACEBOOK APPS?

A. You Tube B. Facebook C. Google D. Yahoo! TOP WEBSITE VISITED IN 2012?

A. You Tube3rd B. Facebook2nd C. Google1st D. Yahoo!4th TOP WEBSITE VISITED IN 2012?

WHAT IS THE VALUE OF FACEBOOK? Discuss

CAN FACEBOOK KEEP GROWING? Discuss F-commerce Integration Ticket buying One stop shop

THANK YOU