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Social Networks

This month in tech history: February - Facebook

Facebook likes February it seems; it was first launched in February (2004), filed for IPO in February (2012), and announced the acquisition of WhatsApp in February (2014). While I can’t comment on Mark Zuckerberg’s apparent fondness for Feb (maybe he’s just a romantic?), here’s a quick rundown of each event.

 

4 February 2004: Facebook launched

Unless you’ve been under a rock for the last 12 years, you’ll have at least heard of Facebook. Mark Zuckerberg first launched his social network, “Thefacebook”, on 4 February 2004. Originally located at thefacebook.com, it was initially limited to Harvard students. Fellow students Eduardo Saverin, Dustin MoskovitzAndrew McCollum, and Chris Hughes joined Zuckerberg to help promote the fledgling social network, and in March 2004, access to the site was expanded to Columbia, Stanford, and Yale universities, followed gradually by most universities in the United States and Canada.

In 2005, the company dropped "the" from its name after purchasing the domain name facebook.com for US$200,000. The following year, in September 2006, Facebook access was extended to anyone with a registered email address.

 

1 February 2012: Facebook announces IPO

Facebook filed for an initial public offering on 1 February 2012. The preliminary prospectus announced that the website had 845 million monthly active users and featured 2.7 billion daily likes and comments. The prospectus also noted that “active user growth rate will decline over time as the size of our active user base increases”, acknowledging that “A number of other social networking companies that achieved early popularity have since seen their active user bases or levels of engagement decline”.

Facebook Inc. began trading on the NASDAQ, using ticker symbol FB, on 18 May 2012, but the first day was fraught with problems - trading was delayed by half an hour due to technical problems with the NASDAQ exchange and a number of orders failed to go through, prompting Forbes’ Bill Singer to observe: “The great Web 2.0 darling and the supposed state-of-the-art stock market on which it debuted collided with the resulting scene little more than loose hubcaps spinning off from the rising steam of the mangled mess.”

However, after applying for a $5 billion IPO, (one of the biggest offerings in the history of technology), the IPO went on to raise $16 billion – enough to still be in the top 10 global IPOs (as of January 2015).

On 13, July 2015, Facebook became the fastest company in the Standard & Poor's 500 Index to reach a market cap of $250 billion.

The company’s Q4 and full year 2015 earnings were reported on 27 January. Revenue for the full year 2015 was $17.93 billion, an increase of 44% year-on-year, net income was $3.69 billion. Monthly active users were 1.59 billion as of 31 December 2015, an increase of 14% year-on-year, and 88% since the IPO.

 

19 February 2014: Facebook acquired WhatsApp

In a statement released on 19 February 2014, Facebook announced that it had “reached a definitive agreement to acquire WhatsApp” for $19 billion – $4 billion in cash, approximately $12 billion worth of Facebook shares, and $3 billion in restricted stock units to be vested over four years. When the figures finally came in, it was, as expected, Facebook’s largest acquisition to date. Facebook completed the purchase for up to $22 billion for a startup that had generated $10.2 million in revenue the previous year.

The acquisition wasn’t well received by everyone. On 9 May 2014, the Iranian government announced proposals to block access to WhatsApp to Iranian residents because of “the assumption of WhatsApp by the Facebook founder Mark Zuckerberg, who is an American Zionist.” The decision was later reversed by Iranian president Hassan Rouhani.

Originally founded in 2009 by Brian Acton and Jan Koum, WhatsApp has now grown to 900 million monthly active users. WhatsApp is, at the moment, still independent from Facebook, but Zuckerberg’s company can use technologies for the Facebook Messenger app.

On 18th January 2016, Koum announced that WhatsApp users would no longer be subject to the annual subscription fee

 

 

More on Facebook:

Facebook’s free internet: Fighting a losing battle?
Banning teenagers from Facebook is madness
Should we ‘unlike’ Facebook’s Internet.org for emerging markets?
Counting users in billions – WhatsApp leads messaging gold-rush
Facebook at work and the problem with consumerisation of IT
InfoShot: Teens fed up with Facebook?
WhatsApp with your value as a user?
Did Facebook get a bargain in WhatsApp?

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Kate Hoy

Kate Hoy is Editor of IDG Connect

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