If you are part of the social media generation, then Facebook isn’t new to you. The social networking site literally created a new medium through which people could communicate with each other. Facebook, though, was not the first networking platform that was based on creating connections between people; Friendster, MySpace, and Hub Culture had already created a social networking space. These spaces, by themselves, were highly popular with their users. Facebook took social networking to a whole new level though; and that’s where users started changing teams.
A brief history
Facebook started off as a student directory which contained photos and basic information of students at Harvard developed by 20-year-old Mark Zuckerberg. He later launched “Thefacebook”, a social media platform for users to connect. This concept, initially available to Harvard students, expanded to include Columbia, Stanford, and Yale, and later reached out to almost every university in the country. It soon received investments from PayPal, Accel Partners, Apple Inc., and Microsoft, allowing it to further expand its operations.
The Microsoft connection
Every big company today has seen success thanks to the backing of another big company. And Facebook is no different. In 2007, it partnered with Microsoft for a deal totaling $240 million. The deal gave Microsoft a 1.6 percent share in Facebook, which also allowed it to run ads on the site. The deal valued the company at $15 million – quite a remarkable achievement for a 2-year-old baby enterprise.
The sculpting of a new world order
Not long after the Microsoft alliance, Facebook started to see an increase in the number of its users. A website that was launched in 2005 grew to have a user base of over a million, which grew to a hundred million, now standing at over a billion. That’s roughly one-seventh of the world’s population. All this despite being a rookie among giants like MySpace!
When MySpace, the then-ruler of social media, was usurped by Facebook, its former head, Mike Jones said that Facebook perfected the concept of social networking whereas MySpace merely showed users what could be done. In other words, Facebook created a comfortable platform through which users were able to catch up with old pals, share pictures and videos, play games, post status updates, and do so much more which wasn’t available on MySpace.
Association through acquisition
Facebook is valued at over $250 billion today because of its smart acquisitions. The social networking giant has acquired many popular companies, each with a large user base, thus expanding its own visibility and reach in the market. Starting with the domain name facebook.com in 2005 to Faciomatics in 2016, Facebook has over 60 companies under its umbrella. Most of these companies operate in the technology space with functions such as photo management, speech recognition, e-commerce, fitness tracking, and so on.
Of these acquisitions, four companies stand out because of the immense popularity they had even before they were acquired by Facebook – Instagram, WhatsApp, Messenger, and OculusVR. Anyone remotely associated with social media can claim to have used at least one of these applications. Through these acquisitions, Facebook constantly sets the bar high for creativity and innovation.
While some of these acquisitions occur smoothly, there are others which have hit a few bumps along the way. Recently, a court awarded $500 million to Zenimax, a company that sued Oculus VR, which was acquired by Facebook in 2014. The lawsuit claimed Oculus VR breached its contract with Zenimax and was ruled in favor of the latter. Facebook has also been accused of spreading “fake news”, which many believe contributed to the outcome of the 2016 U.S. presidential election.
Despite these bumps and bruises, Facebook does not seem to be losing its user base; in fact, its popularity keeps rising. In 2016, its advertising revenue grew by 53 percent and the number of users is expected to reach 2 billion by the end of 2017.
The impact of Facebook was such that it made a billionaire out of Mark Zuckerberg who had not even hit 25 at that time. Today, Facebook is the most popular social media platform, surpassing Twitter and Tumblr. Its success can be attributed to a number of smart and strategic business moves. It has become the leader in all things technology, media, communication, connection, news, innovation, and even acquisition. By the looks of it, its position seems to be quite secure for a long time.
With Facebook, Zuckerberg played a strategic game of Monopoly, completing the board enough times to take down all in his tracks. Building on his brand by collecting property, keeping his Get Out Of Jail FREE card handy, passing Go for that $200 with every round, leaving his opponents near bankrupt if not already. When innovation leads, who can stop your bank?
The Zuckerberg Monopoly is an anomaly to study.