Facebook, the second largest social network on the Web with around 60 million members, is one of the fastest-growing and best-known sites on the Internet today.
The 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.
Like other social networks, the site allows its users to create a profile page and forge online links with friends and acquaintances. It has distinguished itself from rivals like the larger MySpace, owned by the News Corporation, partly by imposing a spartan design ethos and limiting how users can change the appearance of their profile pages. That has cut down on visual clutter and threats like spam, which plague rival social networks.
In May 2007, Facebook unveiled an initiative called Facebook Platform, inviting third-party software makers to create programs for the service and to make money on advertising alongside them. The announcement stimulated the creation of hundreds of new features or "social applications" on Facebook , from games like Scrabble to new music and photo sharing tools, which had the effect of further turbo-charging activity on the site.
As a result, estimates of Facebook's valuation soared during the summer of 2007. In October, Microsoft outbid its archrival Google to invest $240 million for a 1.6 percent stake in Facebook, which valued the company at a startlingly rich $15 billion.
Facebook's rise has been marked by several controversies. Three other Harvard students maintain that they came up with the original idea for the service and that Mr. Zuckerberg, whom they had hired to write code for the site, stole the idea and surreptitiously created a rival company. The three students started a rival company, ConnectU, and have sued Facebook in a federal district court in Boston. Facebook has denied the allegations; the case is pending.
Another Harvard classmate, Aaron Greenspan, asserts that he created the underlying architecture for both companies, but has declined to enter the legal fray .
In November 2007, Facebook again created a storm when it announced a new advertising system called Beacon, in which users' purchases or activities on some 40 partner sites were broadcast to their Facebook friends. Some users claimed that they were not adequately warned about the feature, and the political activist group MoveOn.org organized a protest group on Facebook, which attracted more than 70,000 members.
In December, Facebook capitulated to a key demand of the protesters by offering users an easy way to decline to take part in Beacon. — Brad Stone, Dec. 7, 2007