• From Harvard University to the whole world
• 500 million Facebook users in just six years
• From technology giant to global media group
The story of Meta first began under the name Facebook in 2004 in a student residence at the renowned Harvard University. At that time, Mark Zuckerberg was studying psychology and computer science there – a degree he never completed. Instead, he founded one of the most successful companies since the advent of the Internet.
Facebook as a network for students
What started as a joke turned into a brilliant idea for Facebook founder Mark Zuckerberg. On the “Facemash” website, Zuckerberg published pictures of female students that he had previously illegally downloaded from Harvard’s university servers. Visitors to his website had the opportunity to rate people according to their degree of attractiveness. However, due to the large number of protests, this page was only online for a few days.
In the spring of 2004, the first Facebook prototype page called “Thefacebook.com” went online. What was originally only reserved for Harvard students expanded rapidly and spread to other universities in America. Just three months later, over 30 universities had their own Facebook network. By the end of 2005, Facebook had more than five million users and continued to grow rapidly after high school students were able to join the network.
Facebook is growing and thriving
Facebook’s rapid growth did not go unnoticed by PayPal founder and investor Peter Thiel. Thiel was the first investor to support Facebook with $500,000 in exchange for a seven percent stake in Facebook. In 2007, Microsoft CEO Steve Ballmer also received 1.6 percent of the company, but Ballmer had to put a sum of 240 million US dollars on the table. At that time, Facebook already had around 50 million members.
Even in the early years, Facebook founder Zuckerberg was confronted with various allegations. Brothers Tyler and Cameron Winklevoss accused him of stealing their idea to found Facebook. Although the twins were unable to win a related lawsuit, they received a total of $65 million in compensation.
In March 2008, Facebook was also launched in Germany and one year later, the “Like” button was added, one of the most influential innovations to date. The company exceeded the mark of over 500 million Facebook users in July 2010, just six years after it was founded.
Facebook goes on a shopping spree and goes public
Facebook made its first major acquisition in 2012, buying the Instagram photo service for around $1 billion.
Just a short time after the takeover of Instagram, Facebook went public in May 2012 and thus launched the largest IPO of an Internet company to date. The proceeds from the IPO totaled around $16 billion, making Mark Zuckerberg the youngest living self-made billionaire. In September 2012, Facebook also broke the one billion member mark. In summary, a thoroughly successful year for the company headquartered in California.
In February 2014, the messenger service WhatsApp was taken over for billions. For a total of 19 billion US dollars, Facebook swallowed up the second major online network after Instagram, thereby expanding its dominance on the Internet. Just a month later, the virtual reality company Oculus followed, which was bought for a total of two billion US dollars. According to Statista, around 3.02 billion users worldwide visited the Meta platforms every day in the first quarter of 2023. The stock market value of the technology giant was around 679 billion US dollars in mid-June 2023.
Facebook must respond to criticism
Facebook is repeatedly criticized for its controversial handling of data protection, with the use of personal data for advertising purposes repeatedly causing Facebook boss Mark Zuckerberg to explain himself.
In March 2018, one of the biggest scandals to date involving illegally purchased Facebook profiles became public. The analysis company Cambridge Analytica is said to have received the data from around 87 million Facebook profiles and thus the 2016 presidential election campaign in favor of donald trump have influenced. In the course of this, Facebook boss Mark Zuckerberg had to repeatedly answer questions before the US Congress. However, the allegations have not yet been proven and there are still doubts.
The influence of Facebook on the opinion-forming of the general public is still underestimated. Various studies, such as those by the Reuters Institute in Oxford, show that around 41 percent of Americans use Facebook as their preferred news source; in Germany, this figure was around 23 percent in 2015. Facebook has therefore developed from a technology company into one of the world’s largest media groups and must accordingly assume responsibility for the published content. Most recently, the group had prohibited advertisements of a political nature in the context of the 2020 US presidential election. The advertising stop is intended to prevent “confusion or abuse”, as the company explained, which, among other things, used this measure to keep aggressive advertising campaigns away from the platform in the hottest phase of the election campaign.
Own cryptocurrency?
In June 2019, Facebook announced that it wanted to make a foray into the cryptocurrency business. The special feature of the planned currency called Libra was the idea of separating itself from other cryptocurrencies by being hedged by various other currencies and government bonds and by being able to be traded worldwide. As the Tagesschau reports, Facebook boss Mark Zuckerberg argued before the US Congress that the financial system had failed and that the conventional financial structure could no longer keep up with the demands of today’s digital world. However, the concept met with strong opposition, both data protectionists and regulatory authorities defended themselves against the plans of the group with strong criticism of the planned cryptocurrency. After the companies Visa and MasterCard, who were initially willing to form a partnership, left the sinking ship, it became quiet about the Facebook cryptocurrency for the time being, and PayPal also ended the talks. The media spoke of an “exodus” in the project.
At the end of 2020 the idea came up again when the project was resumed under the name Diem. The stablecoin project that was founded, which according to the group had the particular aim of making it easier for people in developing and emerging countries to access the financial market, was completely buried again shortly after the announcement. The extensive rejection of the project by the regulatory authorities in both the EU and the US is seen by experts as the main reason for the failure. In early 2022, Diem was ultimately sold to the now-liquidated Silvergate Bank.
Ex-employee raises serious allegations against group
The whistleblower scandal surrounding ex-employee Frances Haugen in 2021 also damaged the group’s image. After a brief stint with the group, Frances Haugen resigned and subsequently made serious allegations about the company’s business practices. Among other things, Haugen accused those responsible at the tech giant of not adequately dealing with the possible damage that Instagram could cause, especially among younger users. As the RND reports, Haugen’s criticism also aimed at the allegedly too profit-oriented mentality at Facebook, which is only interested in growth and ignores the negative effects of the various platforms. According to a series of reports from the Wall Street Journal, from the so-called “Facebook Files”, it is clear that Instagram in particular causes dissatisfaction with their own bodies, especially among female users, and thus promotes eating disorders and depression. The group defended itself, among other things, by replying that further data from the same studies also reflected the statements of other teenage users, who can derive a lot of useful information from the platform. Nevertheless, plans for an Instagram version for ten to twelve year olds have been put on hold for the time being.
Facebook becomes meta
In early October 2021, Mark Zuckerberg, the founder of Facebook, announced a major restructuring at the Facebook Connect 2021 conference. All Facebook-related apps and applications have been bundled under a new company name, Meta. This name change went hand in hand with a fundamental reorientation of the company, which intends to focus more on the development of applications in virtual space, also known as the metaverse. Zuckerberg sees the future of technology and communication in the metaverse. In a letter released at the same time, he explained that the next stage of technological development will be an even more immersive platform, an “embodied internet” where you actively participate instead of just passively watching. According to the letter, the metaverse will influence any future product development by the company. According to a company press release, the Metaverse will “feel like a hybrid of today’s online social experiences, sometimes augmented in three dimensions or projected into the physical world.” Meta already sells virtual and augmented reality accessories and offers various applications and games in the virtual world.
Editorial office finanzen.net
Leverage must be between 2 and 20
No data
More news about Meta Platforms (ex Facebook)
Image Sources: AHMAD FAIZAL YAHYA / Shutterstock.com, Ink Drop / Shutterstock.com