On Facebook's 10th anniversary, here's a look at the company's highs and lows as it grew from a dorm room idea to the world's biggest social network.
They grow up so fast, don't they?
Facebook, which launched back in 2004 as a dorm room project of Mark Zuckerberg, Eduardo Saverin, Chris Hughes, and Dustin Moskovitz, turns 10 years old today. Inc. has been following the social networking giant every step of the way. Here, in honor of Facebook's big double-digit birthday, we've decided to take a look back at 10 of the biggest moments in the company's history.
At the time, Facebook was just two years old and had already attracted 7 million users at high schools and universities. But while Facebook had a hold on some 80 percent of the student social networking market, expanding to the general public and to businesses was not yet in the playbook. Instead, Zuckerberg said at the time he was looking to build out social networks for other narrow demographics, like the military. "We don't think of ourselves as a college network," he said at the time. "It's a utility to increase information flows, where you can express yourself and meet the people around you."
These days, you're not a true Silicon Valley star unless you've turned down a billion (or multi-billion) dollar offer. But Facebook certainly played a part in setting the trend when Zuckerberg boldly rebuffed a $1 billion offer from Yahoo. As Peter Thiel, a Facebook board member, explained on stage at South by Southwest in 2013, Zuckerberg was resistant to the idea from the outset. Thiel recalled the young founder saying, "I don't know what I could do with the money. I'd just start another social networking site. I kind of like the one I already have."
2010: Changes to Facebook's privacy settings inspire a major backlash from users.
Remember the supposed Facebook diaspora? You know, that period of time back in 2010 when we were all going to quit Facebook, because it dared to change its privacy settings? It was the beginning of more targeted advertising, and the changes enabled third-party sites to access Facebook user data--unless, of course, users sifted through the site's complex new privacy settings and blocked third-party sites from accessing their data. The backlash from users was mighty, but in the long run, few of them actually fled.
It's hard to remember a time when the ubiquitous Like button didn't exist, but back in 2010, it was a novel concept. It was also a major advance in terms of the way brands and businesses would come to use Facebook in the future. Rather than simply communicating with users who visited their own Facebook pages, brands could now study data about user behavior and capitalize on their perceived interests. "This technology will help brands grow their Facebook connections rapidly by turning visitors to their Web sites into viral engines," Mike Lazerow, CEO of social marketing company Buddy Media, told the San Francisco Chronicle at the time.
"A million dollars isn't cool. You know what's cool? A billion dollars." With that line, delivered by Justin Timberlake playing Facebook investor Sean Parker, The Social Network became perhaps the most quotable film of the year. What's more, it made entrepreneurship and the process of starting a business look sexy. But as much buzz (and Oscar cred) as the film got, Zuckerberg maintained all along that it wasn't an entirely accurate portrayal of his startup days. "[The movie suggests that] the whole reason for making Facebook and building something was because I wanted to get girls or because I wanted to get into some social institution," Zuckerberg told Y Combinator's Jessica Livingston during an on stage interview back in 2010. "I think it's just such a big disconnect from the way people who make movies think about what we do in Silicon Valley--building stuff. They just can't wrap their heads around the idea that someone might build something because they like building things."
2012: Facebook acquires Instagram for (around) $1 billion.
Inc. dubbed it the deal of the year. Instagram was just about two years years old, had never earned a penny of revenue, and yet, Facebook anticipated what a major opportunity (read: threat) it could be in the future. "For years, we've focused on building the best experience for sharing photos with your friends and family," Zuckerberg wrote on his Facebook page at the time. "Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests."
It looked like a huge success... at least at first. Raising $16 billion in its public offering, Facebook overtook Google, becoming the tech company with the largest IPO in history. But then...
2012: Facebook's stock price takes a nosedive over the following days.
After its successful IPO, Facebook's share price precipitously fell for days and weeks on end. A highly publicized trading glitch reported by Nasdaq complicated matters, causing a delay in trading, and a slew of botched orders afterward. Many called it a fiasco, and one anonymous source told The Wall Street Journal that even Zuckerberg admitted watching the stock price fall over the ensuing months was "painful" to watch.
It was a sliver of light at the end of a long, dark tunnel. In its first public earnings report following the botched IPO, Facebook reported $1.18 billion in revenue, just slightly higher than the $1.15 billion predicted by analysts. And yet, it wasn't enough to calm investors' nerves after the IPO debacle, and shares of Facebook stock continued to fall. By September, they hit an all-time low of $17.55.
Throughout 2013, Facebook shares continued to rebound on the back of the company's successful mobile strategy. In its fourth quarter, Facebook saw a 63 percent increase in revenue, with more than half of its $2.6 billion in Q4 revenue coming from mobile advertising on smartphones, iPads, and other mobile devices. Facebook shares hit an all-time high after the report. A very happy birthday, indeed.