Is Facebook just a passing fad?
After five years of astonishing success, the youngest self-made billionaire in history is fighting off pretenders to ensure the future remains Facebook
Thursday 05 February 2009
It's a tale of entrepreneurial flair that provokes awe and envy in equal measure. A student at Harvard creates a website for the amusement of his fellow undergraduates so they can exchange notes and keep tabs on upcoming events.
It catches on with their friends, and their friends' friends, so he rolls out invitations to other Ivy League colleges and schools and selected corporations. Two years later, the gates are opened worldwide to anyone over the age of 13 with an email address – and when Microsoft eventually purchase a1.6 per cent share in October 2007, the site appears to have a headline-grabbing value of $15bn (£10bn).
Today, in its fifth birthday week, Facebook has more than 150 million users worldwide, and its founder, Mark Zuckerberg, is rated by Forbes as the 321st richest person in the world. Not bad going for a college dropout. But aside from Zuckerberg's prodigious business acumen, what has been the secret of Facebook's popularity?
Those who doubt its value to humanity will frequently ask "well, OK, what does it do?"; answering that question concisely and coherently is surprisingly difficult. But it has, arguably, been the best attempt yet at creating a container for us to bring our real-world friends together in an online community. The more we put into it, the more we get out of it – so Facebook enthusiasts become even more evangelical, while those who half-heartedly dip their toe into its waters remain unconvinced.
Uploading photos, sending messages, playing Scrabble or checking out new music are all things that you can do perfectly well elsewhere online but by rolling up all these things and more into one well-designed, easy-to-use website has meant that millions go there automatically when they open their browser window. And it hasn't just been a Western phenomenon; an intense localisation programme has meant that its penetration into non-English-speaking markets such as Italy, Cuba, Austria and Albania has eclipsed that of its competitors.
Unsurprisingly, its rise to prominence has not been without hiccups. There have been the inevitable lawsuits from Zuckerberg's former college friends who claim that some of his innovations were actually theirs. Then there's the regular blocking of the site by companies whose IT departments can clearly see the amount of time that employees fritter away on it.
But the more serious issues have surrounded privacy. Facebook insists that you use your own name rather than an alias when you sign up (anyone opting for an obviously fictitious surname, such as Stardust, will have their account suspended) so anything we choose to reveal on the site, from our birthdate, to our taste in music or our enthusiasm for abseiling is inextricably linked to us and stored for posterity – even if we decided to close our account.
As Facebook's value as a company is almost entirely related to its ability to target advertising at us in the sidebar of the website, it could be accused of almost disingenuously persuading us to reveal information for our own benefit and amusement, when, in fact, that information has a cash value. Facebook's introduction of a system called Beacon, which quietly gathered additional information about us and our purchases from participating sites in order to further hone their advertising techniques, was deemed to be a step too far and resulted in an apology from Zuckerberg and substantial revisions of the way the system operated.
A recent redesign of Facebook, forced through against the wishes of many regular users, was a gamble that neatly summed up the dilemma faced by social networking websites, and indeed Facebook's prospects for the future: how to hang on to users?
Facebook had little choice but to adapt the website to allow more space for content, games, features and advertising but risked alienating users who simply liked things to stay as they were. The gamble appears to have paid off for the time being but Zuckerberg need only look at the history of social networking to know that the site's future is by no means guaranteed. Friends Reunited created a huge wave of interest in 2001 as people flooded to sign up; today, its occasional emails begging you to pay the site a visit seem like a desperate cry for help. Friendster's boom period came in 2003, but today – at least for users outside Asia – it's something of a ghost town.
MySpace, purchased by Rupert Murdoch in 2005, found itself displaced last year by Facebook as the most popular social networking site; while that could be put down to MySpace's ugly interface or persistent problems with spam, it could equally be the case that, just like our favourite pubs, our favourite clubs or indeed our circle of friends, social networks are ephemeral. When we get bored, we move on to look for something different. And the explosion of interest in the microblogging service Twitter over the past couple of months has undoubtedly been at the expense of some activity on Facebook.
Perhaps we're becoming ambivalent about the multi-faceted Facebook experience, and instead seduced by the brilliant simplicity of Twitter's 140-character-limit messageboard. The battle to stay in the social networking pole position will hinge around wireless communication and handheld devices. Both Facebook and MySpace are designed to be accessed from a computer, and while mobile versions are available, they're essentially stripped down versions of the websites.
As phones are increasingly able to identify our location via GPS and wireless networks, it's only a matter of time before we'll be able to walk into a party, check our phone, and be told who else in the room shares our interests. Services for the iPhone such as Brightkite and iRovr are moving down that route, as is Google's newly-launched Latitude tool; if Facebook is to avoid being seen as old hat, it's these challengers it needs to be taking on rather than MySpace, which it has essentially already beaten.
None of this, of course, addresses the question of how a business that means so much to so many will actually end up making serious sums of money. Zuckerberg says that monetising the business isn't his priority right now, and that will come about three years down the line. The youngest self-made billionaire in history sounds confident. But does he know what he's doing?
The reclusive billionaire
Being the face of Facebook has not been easy for Mark Zuckerberg. The 24-year-old billionaire, who founded the website in his dorm at Harvard with three friends – Dustin Moskovitz, Chris Hughes, and Eduardo Saverin – has a preference for privacy.
He can come across as grumpy and aloof. The demands of globe-trotting, he admits, sit uneasily with his geeky domesticity. The son of a dentist, Zuckerberg was born in the wealthy suburb of White Plains, north New York, and grew up in nearby Dobbs Ferry. He attended state schools until the age of 16, when he was sent to the exclusive Phillips Exeter Academy in New Hampshire, which appears in many of American novelist John Irving's most famous books. He was a computer nerd, very much in the tradition invented by Bill Gates. Having built a programme to help his father's practice run more smoothly, he played a version of the strategy game Risk and built a music player called, nerdily enough, Synapse.
Microsoft and AOL thought they'd spotted genius, and tried to recruit him. He resisted, instead taking up a place at Harvard to study Psychology and Computer Science, only to drop out in his final year (just as Gates did) when interest in Facebook ballooned.
Renowned for his dishevelled, just-out-of-bed appearance, Zuckerberg is rarely seen in anything other than jeans, T-shirt, and sandals – de rigueur in Palo Alto, California, where he is now based. He carries a BlackBerry and iPhone with him at all times, and sees Donald Graham, chief executive of The Washington Post, as his mentor. "He takes a very long-term view of business", Zuckerberg says. "So much of technology is focused on a really short cycle".
He retains a youthful idealism, always firmly answering "no" when asked if he is motivated by profit. Critics contend that's easy to do when Forbes ranks you the 785th richest person in the world, with a net worth of around $1.5bn (£1bn). Zuckerberg claims instead to be motivated by a profound belief in the capacity of the internet to rewrite the rules of communication. "The goal of the company," he says, "is to help people to share more in order to make the world more open and to help promote understanding between people". This mission for his company will "build a pretty good business" in which "everyone will be financially rewarded". It's worked so far.
I couldn't live without it
When I first signed up for the service, in a diversionary lull between revision sessions for my university finals, the mechanics of the whole thing were baffling. I was doing fine with email and a telephone, thanks very much.
These days, though, I would far rather lose my mobile than have my profile deleted. The thing about Facebook today – at least among twentysomethings and below, and amongst wider and wider swathes of everyone else – is that it's reached a critical mass, where such a huge majority uses it that not to is socially hobbling. If I wasn't on Facebook, I wouldn't find out when my friends got a new job, or a new phone number, or a new squeeze. I wouldn't be able to cream them at Scrabble... and I wouldn't get invited to any parties.
Facebook doesn't pre-empt other kinds of social interaction; it facilitates them, enriches them, and keeps you close to the people you care about. Also, it makes you much better at turn-based word games.
I despair of my generation
When I was at university two years ago, Facebook had the social scene in a stranglehold and, for brief moments, its significance seemed to eclipse the old-fashioned, tangible world of parties and drinking.
It burrowed into the social fabric of college life and made itself indispensable; forget to check Facebook and you could guarantee you would miss a party, a play starring a friend, or worse, someone's birthday. But the thing I most despair of about being a member of the Facebook generation is that is has dragged our tangled web of friendships and relations into the very public sphere of the internet.
By defining everyone from a soulmate to a casual acquaintance as a "friend", whole shades of meaning and social nuance have been rendered irrelevant. I feel for my younger sister and her friends, who think nothing of hours browsing friend's photos and wall posts. At least I experienced a world before the newsfeed and the "poke".
Status update: Facebook facts
* 150 million users worldwide
* Originally called TheFaceBook by founder, Mark Zuckerberg
* More than 24 million photos are updated daily
* The maximum number of friends is 5,000; the average is 120
* Over 70 per cent of users are outside the US, and collectively spend three billion minutes on the site daily
* More than 52,000 applications are available on Facebook
* Facebook employees, in common with those at Google, get three free meals a day
* The site has been blocked in Syria and Iran
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