The Facebook Effect

 

Facebook is the fastest growing and largest social networking site in the world. From its infancy in the dorm room at Harvard created by Mark Zuckerberg and his roommates to its present state of more than 500 million registered users, this phenomenal novel, “The Facebook Effect” tells a remarkable story about the founding and rise of Facebook.

To those of you who have watched ‘The Social Network’, many of you would have known that the story was adapted from another novel called “Accidental Billionaires”. However, The Facebook Effect gives a more holistic view about the history of facebook.

To truly understand how facebook really came about, you must read this book. As any user of facebook who is curious on how the website suddenly became an overnight sensation, this book tells it all, its rise and challenges during its growth years, the internal conflicts and the big players that were involved in helping or impeding the growth of Facebook.

The book is told in a chronological fashion, allowing readers to follow and chart the growth of the website including:

– how Facebook gained so much traffic early on
– how they scaled the site school by school
– the major decisions Mark and his team grappled with at every stage
– the strategy and thought process that went through Zuckerberg’s mind
– how they raised their first dollar of investment
– what sort of information did they pitch their first professional investors

Below are some of the excerpts from the book that I personally find interesting in various aspects about Facebook in general.

On Harvard and the spirit of entrepreneurship:

In the common room of Suite H33 in Kirkland House, Ivy League privilege and high geekdom converged. What happened there turns out not to have been common, but at the time it seemed pretty routine. Zuckerberg was hardly the only entrepreneur beavering away on a business in his dorm room. That wasn’t too noteworthy at Harvard. Down every hall were gifted and previleged children of the powerful. It’s presumed at Harvard that these kids are the ones who will go on to rule the world.

On the implementation of “status updates”:

Thefacebook [an early name before facebook was widespread] also drew inspiration from another important source – the so called away messages that users of AIM posted when they weren’t at their computers. These short, pithy phrases were often used by AIM users to show off their creativity. Though there was room for only a few words, users included political statements and humour as well as practical information about the account holder’s whereabouts. AIM away messages were so important to Zuckerberg that another on of his earlier software projects was a tool that alerted him when friends’ messages changed. Thefacebook was going to be a robust combination of the AIM away message and that alert tool- a place where you could host more information about yourself so friends could keep track of you. (Today’s Facebook status update traces it heritage directly on those AIM away messages)

On accepting one another as friends:

Harvard, for example, could see most Harvard students’ profiles. That was the default. Harvard students could not, however, see profiles of students at Stanford [upon opening Thefacebook school by school]. But for Thefacebook to continue to grow, it would need cross-campus linking, and there was a growing chorus of complaints that it wasn’t possible. So Zuckerberg and Moskovitz [Zuckerberg’s dorm-mate and co-founder] decided that such links could be created by the mutual agreement of both people. This became the template for how Facebook connections are established to this day.

On ambition and luck:

“Having genius and ambition alone isn’t going to get you there. It’s really important to be lucky,” says Moskovitz. “But Mark had all three in spades, including luck. He just fell into the right situations alot, and had extremely good timing. And when he saw a good idea he wanted to pursue it, whereas another person might have felt he need to finish school first.” Facebook’s ultimate success owes alot to the face that it began at college. That’s where people’s social networks are densest and where they generally socialize more vigorously that at any other time in their lives.

On generating some revenue through advertisements:

One of the first advertisers was MasterCard, seeking application for a special credit card for college students. But like Y2M [an advertising company] itself and its other advertisers, MasterCard executives were skeptical Thefacebook could really deliver results. So instead of simply paying to display ads, as it did with this campaign on other college sites, MasterCard agreed to pay only when a student filled out a card application. At this point Thefacebook operated at about twelve schools. MasterCard turned on its campaign at 5PM on a Thursday. Within one day it received twice the applicants it had expected for the entire four month campaign. Thefacebook was getting ads in front of exactly the right customers – wealthy undergrads at the best schools. MasterCard continued advertising.

On the concept of “Poking” and competitiveness of ‘Friending”:

Poking was a particular fascination in those days, even among the supposedly sophisticated students of Harvard. There was no certainty that a pike on Thefacebook would be seen as flirting – at least in theory it could be construed as just a friendly gesture – so even the shy occasionally found the gumption of click on it. The very fact that the meaning of a poke was so indeterminate was one of its appeals. It could mean you liked someone, found them attractive, enjoyed their comment in class, wanted to distract them from their homework, or just wanted their attention. The recipient was only told that he or she had been poked, so was left to interpret that information however the would. The proper response? A poke back, which Thefacebook’s software politely inquired in you’d like to do. “Friending” had an element of competitiveness from day one, as it had on Friendster and Myspace. If your roommate had 300 friends and you only had 100, you resolved to do better. “Competition definitely caused Thefacebook to spread faster at Dartmouth [ another college that was opened to the Thefacebook],” says Susan Gordon, class of 2006. She was on an Italian study program in Rome when Thefacebook blanketed Dartmouth almost overnight in March 2004. She immediately began receiving emails from friends telling her that she had to join, otherwise she would be way behind when she returned at the end of the quarter.

On the addictiveness of Facebook:

Over the summer, Zuckerberg, Moskovitz, and Parker [entrepreneur who joined Facebook, and original co-founder of Napster] had coined a term for how students seemed to use the site. They called it “the trance.” Once you started combing through Thefacebook it was very easy to just keep going. It was hypnotic,” says Parker. “You’d just keep clicking and clicking from profile to profile, viewing the data.” The wall was intended to keep users even more transfixed by giving them more to see inside the service. It seemed to work. Almost immediately the wall become Thefacebook’s most popular feature.

On the lucrative advertising business potential on Facebook.:

By December Y2M [advertising firm] had signed a landmark deal with Apple Computer. Not only did Apple sponsor a group of Thefacebook for fans of its products, but it also paid $1 per month for every user who joined, with a monthly minimum of $50 000. The group was immediately popular, and the minimum was easily exceeded. This was by far the biggest financial development in Thefacebook’s short history. It alone more or less covered the company’s expenses. Executives at Apple were thrilled because they had acquired a powerful platform which allowed them to be in constant touch with Apple fans in college, whom they began offering special discounts and promotions like free iTunes songs. The deal gratified Zuckerberg because it wasn’t a conventional banner advertisement, which he detested.

On uploading photos and tagging them for the very first time:

After a few weeks, Sittig, Marlette, and Hirsch [employees and designers of the Facebook’s page] quickly came up with a well-designed if conventional photo-hosting service. Like many on the Internet, it allowed users to upload photos and include them in online albums, and enabled others to comment on them. But they knew it wasn’t exactly right. Hirsch, who had years of experience in Internet product design, suggested they take a different approach, something uniquely Facebook. “I wish there was just one really social feature we could add to this,” he said in a meeting. Sittig, a very serious young man with blond bangs whose impeccable beach-boy good looks are seldom graced by more than a fleeting and wry half-smile, considered what that might mean. “I went back and thought a bit,” he recalls, “and I was thinking, ‘You know, the thing I most care about in photos is, like, who’s in them.'”

It was a breakthrough. They decided that Facebook photos would be tagged in just one way – with the names of the people in them. It sounds elementary, but it had never been done before. You would only be able to tag people who had confirmed they were your friends. People who were tagged received a message alerting them about it, and an icon appeared next to their name on the lists of friends that appeared on each user’s page.

The photos team made two other important decisions. To see the next photo, all you had to do was click anywhere on the photo you were looking at. You didn’t need to hit a little “next” button. They were attempting to encourage that “Facebook trance” that kept people clicking through pages on the service. It made looking at photos simple and addictive. They also took a gamble and decided to compress photos into much smaller digital files, so that when they appeared on Facebook they were significantly lower in resolution than the originals. That meant they would upload faster, so users could select a number of photos on their PC and see them online within minutes.

Would people accept low resolution photos? Would they use the tags? On the day in late October when the team turned the Photos application on, they nervously watched a big monitor that displayed every picture as it was uploaded. They first image was a cartoon of a cat. They looked at each other worriedly. Then in a minute of so, they started seeing photos of girls – girls in groups, girls at parties, girls shooting photos at other girls. And these photos were being tagged! The girls just keep coming. For every screenful of shots of girls there were only a few photos of guys. Girls were celebrating their friendships. There was no limit to how many photos people could upload, and girls were putting tons of them.

Ordinary photos had become, in effect more articulate. They conveyed a casual message. When it was tagged, a photo on Facebook expressed and elaborated on your friend relationship. “Pretty quickly we learned people were sharing these photos to basically say, ‘I consider these people part of my life, and I want to show everyone I’m close to them,'” says Sittig. Now there were two ways on Facebook to demonstrate how popular you were: How many friends you had and how many times you had been tagged in photos.

On privacy concerns:

Most people would find these views discomfiting, and Zuckerberg spends little time dwelling on the obvious downside of his vision. The path to more openness is already strewn with victims who privacy was unwillingly removed. As one expert in privacy laws recently asked, “How many openly gay friends must you have on a social network before you are outed by implication?” The problems with privacy on Facebook typically arises when the comfortable compartments into which people have segregated various aspects of their lives start to intersect. You may attempt to project one identity to yourself on your Facebook profile, but you friends through their comments and other actions, may contradict you.

On narcissism, exhibitionism, and voyeurism:

A few dissenters in the young generation find the obsession with Facebook self-presentation unhealthy. Shaum Dolan, a twenty-five-year-old New York assistant in a media firm, has made a deliberate decision to stay off the service. “My generation is unbearably narcissistic,” he said in an email to me. “When I go out with my friends, there is always a camera present, for the singular goal of posting pictures on Facebook. It’s as if night didn’t happen unless there’s proof of it on Facebook. People painstakingly monitor their own Facebook page to see what pictures they get tagged in, or what people would best represent them to their friends.”

Some call such behaviour exhibitionism, or, as my longtime Fortune colleague Brent Schlender put it, a search for “digital fame”. On Facebook we follow the minutiae of our friend’s lives the same way millions follow Britney Spears in People magazine. Andy Warhol famously said that “everybody will be famous for fifteen minutes,”but on Facebook what’s limited is not how long you are famous but how widely. It may be only among circle of friends or school mates. The Internet theorist David Weinberger now posits that “on the Web, everybody is famous to 15 people.”