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Editor’s Note: Encyclo has not been regularly updated since August 2014, so information posted here is likely to be out of date and may be no longer accurate. It’s best used as a snapshot of the media landscape at that point in time.

Facebook is the Internet’s largest social network.

Facebook topped 1 billion active users in September 2012 and was the second-most-visited website in the United States, behind Google, as of 2011. Its mobile platform had 874 million active users in 2013. It is also the top source of traffic to the web’s largest portals, such as Yahoo and MSN.

Facebook generated $3.7 billion in revenue in 2011, of which 85% came from advertising. The remainder of its revenue comes from payments, many from game developers using the platform — particularly from Zynga, which was the source of 12% of Facebook’s revenue in 2011. While some revenue had come from virtual goods such as Facebook Gifts, the Facebook Gift Shop closed in August 2010. Facebook first turned a profit in 2009 and made $1 billion in profit in 2011. It went public in May 2012, though its initial public offering was marred by accusations of giving incomplete information to investors, leading to lawsuits from shareholders.

Facebook was founded in 2004 by four Harvard University students led by Mark Zuckerberg, who remains its CEO. Facebook began as a network for Harvard students but expanded to include other colleges in late 2004, high school students in 2005, corporate networks in 2006, and everyone later that year.

Facebook launched its News Feed in 2006, a development for which it submitted a patent application earlier that year and received one in 2010. Several observers have seen the central role of the News Feed, as well as other innovations such as trending topics, as an attempt to co-opt the features of the microblogging platform Twitter. Facebook launched a news aggregation app called Paper in 2014 that relies on a combination of human and algorithmic news selection.

Facebook also has an Open Stream API, which allows third-party developers to use the feed inside their own applications. In 2011, Facebook added a shorter-form feed called Ticker, as well as a more comprehensive profile page called Timeline. It also bought the link-sharing and conversation services Branch and Potluck in 2014.

In 2008, Facebook launched Facebook Connect, which allowed outside sites to extend users’ Facebook login to their own sites. Facebook Connect was folded into Open Graph in April 2010.

In April 2010, Facebook launched its Open Graph API protocol for sites across the web, spreading its interface and its users’ personalized network to integrate with outside sites. The system also allows third-party sites to gain detailed demographic data about its users. These integration efforts across the web have been understood by some as an attempt to make Facebook the default platform for most of the web’s users. In 2014, Facebook launched App Links to enable app-to-app linking.

Facebook has also moved into Internet search with its Open Graph search engine. In 2013, it expanded its Open Graph search into a full search engine with Graph Search, which put it in direct search competition with Google, along with other networks such as LinkedIn and Yelp. Graph Search expanded to include posts and comments later that year. In 2010, it began allowing users to share their geographic locations with location-based updating. It bought the social check-in company Gowalla in late 2011 and shut it down three months later.

Facebook purchased the mobile photo sharing company Instagram for $1 billion in 2012, a move that was widely seen as an attempt to push more deeply into mobile access, responding to an area in which Facebook had struggled. Instagram launched web profiles in November 2012. The following month, it changed its terms of service to allow the company to sell users’ images to advertisers without notifying them, prompting a backlash among users. Instagram responded by clarifying the changes and vowing to adjust them. The service was used as a significant platform for sharing images during Hurricane Sandy in October 2012, with 800,000 photos posted on that hashtag.

Facebook bought the messaging app WhatsApp for a total value of $19 billion in 2014 in one of the largest tech company acquisitions in recent history. The deal was variously seen as an effort by Facebook to reach into Europe and Latin America, to broaden its offering of mobile services, to pre-empt a potential social messaging competitor, and to expand its dominance over photo sharing. It also bought the virtual reality company Oculus Rift in 2014 for $2 billion and bought the mobile data-charging service Pryte later that year.

Facebook launched Facebook Zero, a free version of its mobile site accessible by feature phones, in 2010. It has become a critical part of Facebook’s efforts to expand in non-Western countries. It expanded those efforts in 2014 with an Internet.org app that offers limited Internet access.

Facebook has moved further into advertising based on socially shared information, including display ads, self-serve ads based on users’ individual information, and advertisements (including video adswithin the News Feed, as well as a mobile app network for third-party apps. In 2014, it bought the video ad company LiveRail. Though Facebook’s ads can be specifically targeted, they are based on anonymous and aggregated information. Facebook’s advertising strategy was questioned leading up to its public stock offering, as a major advertiser announced it was pulling its ads and observers questioned their effectiveness and ability to create long-term value for Facebook.

Facebook has also focused its advertising strategy on conversation around live TV, by providing data regarding such conversation to TV networks in eight countries. To that end, it bought SportStream, which allows live social content to be searched for and displayed more easily, in 2013.

Facebook and journalism

Facebook has become the world’s largest web news reader, and it has encouraged its users to use their News Feed as a customized news reader. It is the second or third largest source of traffic for five major U.S. news sites, according to May 2011 data. By the end of 2013, some evidence indicated that the amount of traffic Facebook drove had significantly increased. Some individual news organizations have pulled back from Facebook, however, claiming the traffic it drives isn’t worth the resources it takes to bring it in. The significant traffic driven from Facebook has led it to become notorious for the type of virally aspirational content often called “clickbait.” Facebook changed its News Feed algorithm to de-emphasize clickbait in August 2014.

Facebook has often been used as an additional method of online distribution and a discussion forum for news organizations’ stories. Some outlets have incorporated live Facebook streams into their website for major news stories. Other organizations have created Facebook pages for several of their individual journalists.

Many reporters have used Facebook to find sources, crowdsource stories, and contact friends and relatives of people involved in breaking news stories. According to one survey, about two-thirds of journalists use Facebook in their reporting.

In 2007, Facebook began allowing users to create their own apps, and news organizations have created apps for headline feeds and news quizzes. In 2011, news organizations began releasing social news apps within Facebook, though two of the original news organizations to use apps — The Guardian and The Washington Post — shut their app down and took it off Facebook, respectively, the following year. Facebook has also collaborated with CNN on a social voting app.

Numerous news organizations have used Facebook Connect to integrate Facebook’s system and login with their sites, starting with CBS’ The Insider in 2008. The following year, The Huffington Post launched HuffPost Social News, which used Facebook Connect to let HuffPost readers see what their friends had read and recommended. In March 2011, Facebook extended this functionality through a revamped Facebook Comments plugin for news sites to use.

The New York Times has sold ads on its website specifically for readers who are referred there by Facebook, and has posted its own ad on Facebook’s front page. Other news organizations have set up and helped manage advertisers’ Facebook accounts.

Journalists have debated about several ethical issues involving Facebook, including being “friends” with sources, posting personal opinions, verifying information shared on Facebook, and being sensitive in approaching those affected by tragedy. Some have warned journalists to be wary in their participation on Facebook because it is a company whose interests might not always align with the public’s.

In July 2010, Facebook launched its Facebook + Media page, an attempt to help news organizations and other potential partners to use Facebook in their work. In April 2011, the company launched its Journalists on Facebook program, an effort to address the needs of news organizations and individual reporters using the service. It added new tools for news organization to analyze conversation on the site in 2013 and launched FB Newswire, which aggregates newsworthy content shared on the site, in 2014. The company also has a position devoted to partnerships with news organizations.


A 2009 Columbia University discussion on Facebook for journalists:

Facebook and privacy

Facebook is built on the principle of social information sharing online, which Zuckerberg has articulated like so: The amount of information people share online will double every year. (This principle has come to be called Zuckerberg’s Law.) Zuckerberg has also said he believes Facebook needs to loosen its privacy controls to keep up with the social norms of increased sharing. In 2011, Facebook launched several developments to its sharing interface that it called “frictionless sharing,” which has been criticized as intrusive. It has also tested technology measuring very granular user data, including cursor movement. Facebook has also been criticized for employing its users in psychological experiments without their knowledge.

Facebook has continually faced privacy concerns throughout its existence, particularly as its privacy policies have become more permissive. Users and other groups have criticized Facebook for giving user information to third-party advertising systems and third-party websites they visit, maintaining control over users’ photos, making user data easily searchablemaking more actions public, and making more information public by default. In response to persistent complains about confusing privacy settings, Facebook simplified those settings in May 2010. In 2014, Facebook enabled anonymous login into third-party apps that limits the amount of information that can be seen within those apps, though the data is still available to Facebook.

Some have filed complaints with the U.S. Federal Trade Commission or suggested that Facebook be regulated more closely by the U.S. government, and others have advocated for an open alternative to Facebook. (The startup Diaspora* tried to provide this alternative in 2010.) Still others have defended Facebook’s privacy policies and its encouragement of freer sharing online.

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Primary author: Mark Coddington. Main text last updated: August 28, 2014.
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