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Facebook Final Paper

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Company Background
In 2004, a Harvard student, Mark Zuckerberg, launched a new social media platform called “The Facebook”. Zuckerberg had already created a number of social media websites including Coursematch and Facemash, but wanted to create a new social media platform that had a sense of “exclusivity”. Zuckerberg launched the website with exclusivity for Harvard students – The Facebook required you had a Harvard.edu email in order to register. Soon after the launch and its growing popularity, the social network expanded to other Boston and Ivy League Universities. Later in 2005, The Facebook would change its name and website to “Facebook” and allow students with any high school or college email to register, including high schools and colleges in the UK. In the fall of 2006, Facebook would scrap their education-only email registry, and allow anyone over 13 years of age with a registered email address to join Facebook. The company’s reach would include over 2,000 colleges and 25,000 high schools throughout the United States, Canada, Mexico, the United Kingdom, Australia, New Zealand, and Ireland. Moving into 2008, Facebook recognized the need for international headquarters to support the rapid growth of the company. They would soon set up their international headquarters in Dublin, Ireland, and begin testing and hiring several computer and software engineers in order to meet the bandwidth and internet traffics of an international online company. Facebook’s user growth would grow from 100 million users in mid-2008 to over 1.2 billion users by the end of 2013. Today, as of November 5, 2015, Facebook boasts more than 1.55 billion active users.
Throughout its years, Facebook has continued to grow and expand its dominance both geographically and financially through acquisitions of FriendFeed, WhatsApp, Instagram, and a number of other social media outlets, but did start out extremely small. Facebook started financially from the pockets of Zuckerberg, and Eduardo Saverin, who both took equity stakes in the company, and used a small number of advertisements on the website to cover the operating costs of the website. Not long after its inception, venture capitalist Peter Thiel made a $500,000 angel investment for 10.2% stake in the company – the first outside investment in Facebook. At this point, Facebook was valued at over $85 million. Throughout 2005 and 2006, Facebook would continue approaching venture capital investors such as Accel Partners, Greylock, and Meritech Capital, and lock in more than $513 million over the next 2 years. It would not be until 2007 when Facebook would receive its next investment. In 2007, Microsoft would announce its interest in Facebook by purchasing a 1.6% share for $240 million – giving Facebook a value of $15 billion. Facebook’s last private investment would come from Hong Kong billionaire Li Ka-shing who invested $60 million. This would be the last of investments made for Facebook, but would not be the end of Facebook’s journey into profitability.
In August 2008, an article by BusinessWeek reported that Facebook was making a switch to profitability, based on reports that employees and venture capital firms began private sales. Initial evaluation and speculation valued Facebook between $3.75 and $5 billion. However, Zuckerberg noted that social media can not monetize like many product-based or search-based companies. In 2012, Facebook began disclosing its profits, and noted that in 2012 alone, profits increased by 65% up to $1 billion from the previous year; profits from advertisements has also increased by 90% up to $3.71 billion from the year prior. After much speculation and years of rumors, Facebook finally filed for an IPO in early 2012. It was expected that Facebook would be the highest, most profitable IPO in new-company history. The IPO would beat expectations, and raise $16 billion at $38 per share, valuing the company at $104 billion – largely due to Facebook selling 25% more shares than planned because of high demand. Trading began on May 18 with a closing day of $38.23 and would continue a rough initial trading period.
Today, Facebook employs over 12,000 people, with 15 offices in the United States, and 35 international offices. The social media company boasts over 1.55 billion users across nearly every country in the world – except about 10. These 10 countries have either banned or have limited access to Facebook: North Korea, Iran, China, Cuba, Bangladesh, Syria, Mauritius, Pakistan, and Vietnam. Most of these, however, are not accessible in the respective country due to limited internet access and internet speeds. With Facebook’s new declaration of “dominating the world”, Facebook has already taken great leaps to overcome the limited access in these countries – in an attempt to reach all possible countries of the world. Facebook has already begun testing new low-access, low-speed Internet connections that work with their website and mobile applications, as well as giving the ability for the website and applications to adjust automatically to whatever the connectivity the user has. Finally, Facebook today trades at $107.10, according to the Nasdaq.com, and now has a market value of $306.4 billion, according to USA Today, and continues to grow, dominate, and further penetrate the various world markets.

References
Carlson, N. (2010, March 5). At Last -- The Full Story Of How Facebook Was Founded. Retrieved November 8, 2015, from http://www.businessinsider.com/how-facebook-was-founded-2010-3#we-can-talk-about-that-after-i-get-all-the-basic-functionality-up-tomorrow-night-1
Company Info | Facebook Newsroom. (n.d.). Retrieved November 8, 2015, from http://newsroom.fb.com/company-info/
Facebook, Inc. (FB). (n.d.). Retrieved November 8, 2015, from http://www.nasdaq.com/symbol/fb
Kirkland, A. (2014, February 4). 10 countries where Facebook has been banned - Index on Censorship | Index on Censorship. Retrieved November 8, 2015, from https://www.indexoncensorship.org/2014/02/10-countries-facebook-banned/
Krantz, M. (2015, November 5). $300B! Facebook just passed up GE. Retrieved November 8, 2015, from http://www.usatoday.com/story/money/markets/2015/11/05/facebook-market-value-300-b-amazon/75226406/ Phillips, S. (2007, July 27). A brief history of Facebook. Retrieved November 8, 2015, from http://www.theguardian.com/technology/2007/jul/25/media.newmedia
Smith, C. (2014, March 13). 200 Amazing Facebook User Statistics. Retrieved November 8, 2015, from http://expandedramblings.com/index.php/by-the-numbers-17-amazing-facebook-stats/

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