The Facebook Effect
(2010), a non-fiction book by David Kirkpatrick, describes the history of the social network known as Facebook and its social implications. The book was shortlisted for the 2010 Financial Times and Goldman Sachs Business Book of the Year Award. In The Facebook Effect
, Kirkpatrick explores the history of Facebook and its evolution from a dorm-room novelty into a company with 500 million users. Kirkpatrick also examines how CEO and chairman Mark Zuckerberg has maintained his focus on growth even when it means having to raise money from investors by selling company equity.
Facebook is one of the most powerful Internet applications ever created, and its reach goes beyond simple socializing. The website has been used by activists to gather support behind a specific movement. For example, in 2008, a civil engineer in Colombia by the name of Oscar Morales created a Facebook group opposing the country’s Revolutionary Armed Forces rebels and their acts of terrorism, proposing nationwide marches against the group. By the next day, the group had 1,500 members, and later that evening more than 4,000 people had joined. One month later, 10 million people across Colombia joined in marches against the organization. This was the result of a Facebook group that started with just one member.
The site was created in 2004 by Harvard sophomores Mark Zuckerberg, alongside Dustin Moskovitz, Eduardo Saverin, and Chris Hughes. Together, they launched the social networking site known as “Thefacebook,” meant to be used by and for Harvard students. Zuckerberg decided to expand beyond campus into other Ivy League schools. Just a few months later, Zuckerberg and his friends were offered 10 million dollars for the rights to their website, which they readily declined, aware that they had tapped into something massive.
The team relocated to Silicon Valley where they rented a house together and worked to improve the site. When the company incorporated, Zuckerberg was given 51 percent ownership, as he came up with most of the design, the software, and the vision for the social network. Zuckerberg and Moskovitz dropped out of Harvard to stay in Palo Alto and continue to build their company. By September of 2005, the website became formally known as Facebook, and a month later they had 5 million members.
Both Microsoft and Google offered to buy the company, but Zuckerberg continually refused, wanting to maintain ownership. Although he wouldn’t sell, he was in need of investors in order to continue growing the business, and so he allowed them to make investments in the company for a total infusion of 375 million dollars.
From the humble beginnings of Facebook, Zuckerberg and his team had always believed in “radical transparency.” However, as the network amassed more users, privacy was increasingly becoming an issue. Zuckerberg scoffed at the idea of curating one’s online presence, in favor of a more holistic profile. Additionally, Zuckerberg’s vision sees Facebook becoming an essential platform for other Internet applications, which it has grown to be, especially among gamers.
Zuckerberg hired Google executive Sheryl Sandberg as his COO and tasked her with making Facebook profitable. She came up with the idea to run “engagement ads,” which function by prompting users to act by offering them something, like a free Starbucks coffee. Facebook is a veritable goldmine for advertisers because it is a source of so much personal data, which can be used to create targeted advertisements.
In 2008, Facebook users were given the option to translate their pages into their own language. This initiative opened the floodgates to users outside the U.S., and by the end of the year, Facebook was operating in 180 countries and 75 languages. Zuckerberg maintains that his philosophy of radical transparency helps to create a better-governed and fairer world. Indeed, the social networking site has become a political tool, famously used by Barack Obama in his 2008 campaign. The site proved instrumental to his communication with voters and outreach, so much so that it was touted as “the Facebook election.”
The website now offers Facebook Connect, which functions as a universal login, allowing users to export their identities wherever they travel on the Internet. Although the site has reached unprecedented levels of success, Zuckerberg maintains that Facebook is still a work in progress. His vision is that eventually, Facebook will become so ubiquitous that there will be very little distinction between being on or off the site. The lines will be so blurred and it will be accepted as a universal form of communication.
Many voice concerns over the lack of privacy and the database that houses so much information, and what that could mean if it were to fall into the wrong hands. There is concern that it could function as a giant surveillance system, but Zuckerberg sees it more as “an exercise in crowd psychology.”