The original idea came from the word Facebook Zuckerberg's high school (Phillips Exeter Academy). The Exeter Face Book was passed around to all students as a way for students to meet classmates for the next year. It was a physical paper book until Zuckerberg took it to the internet. With this success, Zuckerberg, Moskowitz and Hughes moved to Palo Alto for the summer and rented a sublet. A few weeks later, Zuckerberg ran into former co-founder of Napster, Sean Parker. Parker soon moved to the apartment of Zuckerberg and began working together. Parker provided the introduction to his first investor, Peter Thiel, PayPal co-founder and managing partner of Founders Fund. Thiel invested $ 500,000 in Facebook.
With millions of users, Friendster attempt to acquire the company for $ 10 million in mid 2004. Facebook rejected the offer and subsequently received $ 12.7 million in funding from Accel Partners, a valuation of about $ 100 million. Facebook continues to grow, opening up to high school students in September 2005 and the addition of a function of popular photo sharing next month. Next spring, Facebook received $ 25 million in funding from Greylock Partners and Meritech Capital and previous investors Accel Partners and Peter Thiel. The pre-money valuation for this transaction was approximately $ 525 million. Facebook later opened to the networks, eventually accumulating more than 20,000 networks. Finally, in September 2006, Facebook opened up to anyone with an email address.
In the summer of 2006, Yahoo attempted to acquire the company for $ 1 billion dollars. Reports indicate that Zuckerberg actually made a verbal agreement to sell Facebook to Yahoo. A few days later when the price of Yahoo stock plummeted, the offer dropped to $ 800 million and Zuckerberg walked away from the deal. Yahoo later offered $ 1 billion, this time Zuckerberg turned down Yahoo and instantly gained notoriety as the "child" who turned down a billion. This was not the first time Zuckerberg turned down a takeover bid, Viacom had previously tried unsuccessfully to acquire the company for $ 750 million in March 2006.
A sour note for Facebook has been the dispute with the ConnectU social network. ConnectU's founders, former classmates of Mark Zuckerberg at Harvard, Zuckerberg stole argue that the original source code of Facebook. The trial has gone to court, and has now been resolved. Despite the controversy continued, the growth of Facebook in the fall of 2007 was amazing. More than 1 million new registered users every week, 200,000 a day for a total of more than 50 million active users. Facebook has received 40 million page views per month. Gone were the days of Facebook as a social network for college students. 11% of users are over 35 years, and the group's fastest growing demographic is users over 30. Facebook has also experienced tremendous growth worldwide, 15% of the user base is in Canada.
Facebook users passion or addiction, the site is unique: more than half use the product every day and users spend an average of 19 minutes a day on Facebook. Facebook is the site of the sixth busiest in the U.S. and the top photo sharing site with 4.1 million photos uploaded. Based on these numbers, Microsoft invested $ 240 million in Facebook 1.6 percent of the company in October 2007. This implied a valuation of over $ 15 million, the fifth largest Facebook U.S. Internet more valuable, however, with only $ 150 million in annual revenue. Many explained Microsoft's decision as the one driven by the desire to overtake Google.
Facebook's competitors include Twitter, Bebo, MySpace, Friendster, LinkedIn, Facebook, Hi5, Piczo, and Open Social.
