Facebook is one of the most popular social media platforms in the world, with over 2.8 billion monthly active users as of 2020. But how did Facebook get its start? Here is a look at the origins and history behind the creation of Facebook.
The Early Years
Facebook was founded by Mark Zuckerberg along with fellow Harvard College students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. Zuckerberg began developing Facebook’s predecessor “Facemash” in 2003 while he was studying psychology at Harvard. Facemash allowed users to rate the attractiveness of Harvard undergraduates.
The following year in 2004, Zuckerberg began developing a social networking site he first called “TheFacebook”. The idea was to create a site exclusively for Harvard students to connect with each other online. Zuckerberg coded the site in two weeks using PHP and launched it from his Harvard dorm room on February 4, 2004 with the domain thefacebook.com.
Expanding Beyond Harvard
TheFacebook was an immediate hit on campus, gaining over half of Harvard’s student body as registered users within the first month. Its popularity spurred Zuckerberg and his co-founders to expand to other schools. They first opened the site up to students at Columbia, Stanford, and Yale in March 2004 before gradually expanding to other universities in North America.
By December 2004, Facebook had 1 million users. The following year, the company dropped “the” from its name to become “Facebook” and officially moved its operations from Zuckerberg’s dorm room to an office in Palo Alto, California.
Opening Facebook to Everyone
In 2006, Facebook took its biggest step yet in making the transition from a closed college network to a mainstream social media platform. On September 26, 2006, Facebook opened registration to anyone over the age of 13 with a valid email address. This opened the floodgates and helped boost Facebook’s membership to over 100 million active users by 2007.
Key Milestones
Here are some other major milestones in Facebook’s growth and evolution over the years:
- October 2005 – High school networks added
- May 2007 – Microsoft purchases 1.6% share of Facebook for $240 million
- November 2007 – Facebook Beacon launched (later shut down due to privacy concerns)
- July 2008 – Facebook overtook MySpace as the leading social network
- October 2008 – Facebook Connect launched to integrate third-party websites with Facebook
- February 2009 – Facebook reaches 150 million users
- 2010 – Facebook introduces the Like button
- October 2012 – Facebook reaches 1 billion monthly active users
- February 2014 – Facebook acquires WhatsApp for $19 billion
- March 2014 – Facebook acquires Oculus VR for $2 billion
- August 2015 – Facebook introduces live video broadcasting
- April 2017 – Facebook reaches 2 billion monthly users
- March 2019 – Facebook suffers major data breach scandal
Facebook’s Founding Team
Facebook was founded by a close-knit team of Harvard students. Here is a look at the key players who helped transform Facebook from a college network into a global social media empire.
Mark Zuckerberg
Mark Zuckerberg is the co-founder, chairman, and CEO of Facebook. As a student at Harvard, he created the initial versions Facebook from his dorm room. Zuckerberg left Harvard during his sophomore year to focus full-time on Facebook, which he continues to lead today.
Eduardo Saverin
Eduardo Saverin was one of Zuckerberg’s friends who provided funding for Facebook’s launch in 2004. He served as the business manager and CFO of Facebook in its early days. Saverin owned a 34% share of Facebook stock by the end of 2004. His shares were later diluted significantly, leading to legal disputes with Zuckerberg.
Dustin Moskovitz
Dustin Moskovitz was Zuckerberg’s roommate at Harvard who helped build and program the initial versions of Facebook. He left Harvard to become Facebook’s first chief technology officer and later served as vice president of engineering. He owns roughly 6% of Facebook shares today.
Chris Hughes
Chris Hughes met Zuckerberg in his freshman year and co-founded Facebook alongside Zuckerberg, Saverin, and Moskovitz. Hughes served as the spokesperson for Facebook in its initial years. He left Facebook in 2007 to work on Barack Obama’s 2008 presidential campaign.
Andrew McCollum
Andrew McCollum designed Facebook’s first logo and also helped fund the company’s launch. He served as one of Facebook’s earliest engineers. McCollum left Facebook in 2006 to pursue a career in philanthropy and social justice causes.
Facebook’s Major Investors
In addition to investments from its founders, Facebook has raised funds from outside investors over the years, including:
| Investor | Investment Year | Amount Invested |
|---|---|---|
| Peter Thiel | 2004 | $500,000 |
| Accel Partners | 2005 | $12.7 million |
| Greylock Partners | 2006 | $27.5 million |
| Meritech Capital Partners | 2006 | $25 million |
| Microsoft | 2007 | $240 million |
| Li Ka-shing | 2007 | $60 million |
Peter Thiel was one of Facebook’s earliest investors through his venture capital firm Founders Fund. He invested $500,000 into Facebook in 2004 for a 10.2% share of the company. His investment turned out to be very lucrative as Facebook succeeded – his stake today is worth billions.
Later investors like Accel Partners, Greylock Partners, Meritech Capital, and Microsoft provided key funding to fuel Facebook’s early growth. Chinese billionaire Li Ka-shing and Russian investor Digital Sky Technologies have also been major shareholders in Facebook at different points.
Acquisitions Made by Facebook
Facebook has made several high-profile acquisitions over the years to expand its capabilities, including:
- Instagram – Photo sharing app acquired for $1 billion in 2012
- WhatsApp – Messaging app acquired for $19 billion in 2014
- Oculus – VR technology company acquired for $2 billion in 2014
- LiveRail – Video advertising platform acquired for $500 million in 2014
- Onavo – Data analytics company acquired in 2013 (amount undisclosed)
- Giphy – GIF platform acquired for $400 million in 2020
Some of Facebook’s largest acquisitions have been centered around messaging and mobile – such as WhatsApp and Instagram. Both services now have over 1 billion monthly active users each, making them highly strategic additions to Facebook’s family of apps.
Facebook has also made acquisitions focused on emerging technologies like virtual reality (Oculus VR) and artificial intelligence (WIT.ai). Most recently in 2020, Facebook acquired Giphy for $400 million to integrate the GIF platform with Instagram and other Facebook apps.
Finances and Valuation
Facebook debuted on the stock market on May 18, 2012, trading under the ticker symbol FB on the Nasdaq exchange. Facebook set an IPO price of $38 per share, giving the company an initial market capitalization of over $100 billion. However, Facebook shares initially stumbled on the public market before gaining momentum over the subsequent years.
Here is a snapshot of Facebook’s key financials and valuation metrics:
- Current share price (as of October 2022): Around $130
- Current market cap: Over $350 billion
- Total revenue in 2021: $117.9 billion
- Net income in 2021: $39.4 billion
- 2021 revenue breakdown: 98% advertising, 2% other
Facebook generates substantially all its revenue from advertising across its family of apps and services. In 2021, Facebook reported nearly $118 billion in total ad revenue. It has been consistently profitable since 2009.
User Base Growth
Facebook has experienced extensive user growth since launching in 2004, propelling it to become one of the most widely used social media platforms globally. Here is a look at Facebook’s user base milestones:
| Year | Monthly Active Users |
|---|---|
| 2004 | 1 million |
| 2005 | 5.5 million |
| 2006 | 12 million |
| 2007 | 50 million |
| 2008 | 100 million |
| 2009 | 200 million |
| 2010 | 500 million |
| 2012 | 1 billion |
| 2017 | 2 billion |
| 2019 | 2.5 billion |
Facebook took over the social media world in the late 2000s, surpassing rivals like MySpace and Friendster. Its user base exploded following the move to open registration to everyone in 2006.
While growth in Facebook’s core platform has slowed in recent years, user engagement continues to rise. And its family of apps like Instagram and WhatsApp continue fueling much of Facebook’s expansion.
Conclusion
Facebook’s rise from a Harvard dorm room project to a global social networking leader has been one of the biggest tech success stories of the 21st century. Mark Zuckerberg’s vision of connecting the world took root and has grown into a digital empire touching the lives of over 3 billion people.
While Facebook has faced controversies related to data privacy, fake news, election interference, and antitrust issues, it remains woven into the fabric of modern digital life. Facebook pioneered key social media concepts like the News Feed, Timeline profiles, and social sharing that are now standard features users expect.
Looking to the future, Facebook faces the challenges of maintaining user growth and engagement across its mature apps while also developing new VR, AI, and hardware technologies. But the story of how Facebook was created illustrates how a simple idea combined with product innovation, smart strategy, and impeccable timing can radically change an industry.