“A million dollars isn’t cool. Do you know what’s cool? A billion dollars.” So early Facebook investor Sean Parker’s character said to a young Mark Zuckerberg in the film The Social Network.
Ten years on, the founder and chief executive of Facebook may have a new answer to what’s cool: a $150bn market capitalisation, almost $8bn in revenue and personal wealth estimated at $30bn.
Facebook turns ten today, marking a decade since Mark Zuckerberg and fellow students holed themselves up in a Harvard bedroom to create a social network which would grow to more than a billion users.
Thefacebook.com was created “amidst this squalor” of a messy common room, as this article in the Harvard Crimson, the student newspaper, details. Zuckerberg is quoted as saying he was not in it for the money. “I mean, like, anyone from Harvard can get a job and make a bunch of money. Not everyone at Harvard can have a social network.”
Here’s how it looked then:
And here’s how the latest iteration of Facebook, the Paper mobile app released on Monday in the US and speeding up the download charts, looks now:
Before we all get misty eyed about joining the “let’s make this the largest Facebook group ever” group or the days when people used to pretend to get engaged on the site, let’s look at Facebook’s financial “likes” and “lows”.
Top Five Facebook “Likes”
1. Mobile advertising overtakes desktop advertising revenue for the first time. Last week’s earnings call was a coming of age for Facebook as it proved once and for all that it can make money on mobile – in fact, more than on desktop. Revenue soared 76 per cent per cent to $7.9bn for 2013 and earnings rocketed by 82 per cent. An extra $16bn was added to its market capitalisation in after hours trading.
2. Becoming the second largest digital advertising platform after Google. In 2013, Facebook overtook Yahoo to become the second largest digital advertiser in the US, the world’s largest advertising market, and was second to the search engine in the worldwide mobile advertising market, according to data from research firm E-Marketer.
3. Adult engagement on the site is still increasing in the US, according to research from Pew. Some 64 per cent of adult Facebook users visit the site every day, up from 51 per cent in 2010. Estimate how long you have spent (or wasted?) on the social network with this online calculator.
4. Some 201.6bn Facebook friendships have been recorded or made on the site, over 400 bn photographs shared and on average, more than 6bn “Likes” are clicked every day. Each action taken by a Facebook user gives the company more information about the potential consumer which is like cat nip for advertisers. The site has launched a trial to use this data to serve adverts outside Facebook, on its own mobile advertising network.
5. Facebook bought photo-sharing app Instagram for $1bn in April 2012, in its largest acquisition to date. Eyebrows were raised at what some said was a high price but as valuations in Silicon Valley have soared and the number of Instagram users has passed 150m, it has begun to look like a cheap buy. Instagram is experimenting with taking adverts – like this one from Michael Kors on the right – and its pretty pictures are becoming popular with brand marketers.
Top Five Facebook Lows:
1. The Facebook IPO. The social network listed at over $100bn but a couple of months later had fallen to half of that value, shaking investor confidence not only in the company but also in the wider market for technology industry listings. Investors fretted that users were moving to Facebook on their mobile phones, but advertisers would not follow them there because the tiny screens were too restrictive.
2. The privacy scandals: Time after time, campaigners accused Facebook of not respecting its users’ right to privacy. Perhaps the most famous case was the launch of Beacon in 2007, where users’ activities on partner sites such as Zappos.com and Fandango was broadcast to their friends on Facebook. Zuckerberg later admitted that Beacon was a “mistake”. But the company has been embroiled in more fights from using facial recognition technology to ad tracking.
3. The National Security Agency: Mark Zuckerberg accused the US government of creating a massive PR problem for Facebook. The site appeared on a list of US internet companies whose information the NSA could access, according to documents leaked by former NSA contractor Edward Snowden. “It’s like ‘Oh, wonderful!’ That’s really helpful to companies that are trying to serve people around the world and really going to inspire confidence in American internet companies,” he said.
4. Blocked in China: Facebook was blocked in China as part of the government’s broader censorship push in 2009. Independence activists from the Xinjiang province used the social network to communicate until the government swooped in to make the site inaccessible. As the network grows to be more than a seventh of the world’s population, the company would surely like to access the largest market, but for now, it looks unlikely.
5. The TEENS. Last October’s earnings statement was all going so well until David Ebersman, chief financial officer, said the number of younger teens on the social network was in decline. Suddenly $16bn was wiped off the company’s market cap in after hours trading as investors panicked that teenagers were bored of Facebook and turning to rivals such as Twitter and Snapchat, as well as Facebook-owned Instagram. On the next earnings call, Mr Ebersman learnt his lesson: