BACKGROUND: Facebook's eight amazing years

By Andy Goldberg Feb 1, 2012, 22:04 GMT

San Francisco - Facebook founder Mark Zuckerberg started the social networking platform in January 2004 as a way for his fellow students at Harvard University to interact.

He named the site after the photo-filled brochures issued by some universities at the start of each year to help students get to know each other.

Zuckerberg realized, however, that digital technology could vastly expand such social interactions. His site allowed users to post personal profiles, add other users as friends and exchange messages, including automatic notifications when they update their profiles.

Despite facing legal challenges from other students who claimed he stole the idea from them, Zuckerberg quickly guided Facebook to popularity. Within a month of going live, half of all Harvard students had registered for the site. In March 2004, the site expanded to other Ivy League universities, and added other colleges as quickly as it could expand its server capacity.

By June 2004, Facebook received its first venture capital investment when Paypal founder Peter Thiel invested 500,000 dollars for 10 per cent of Facebook.

The company, which until then had been called thefacebook.com, bought the facebook.com site for 200,000 dollars and in September 2005 undertook its biggest expansion yet when it opened its ranks to US high school students. Facebook was already able to boast 5 million users, but growth really took off a year later when it opened registration to anyone over age 13 with a valid email address.

By August 2008, Facebook had 100 million registered users and had rejected a 1.8-billion-dollar buyout offer from Yahoo. It did agree to a 240-million-dollar investment from Microsoft, which valued the company at 15 billion dollars.

By this stage, Facebook had gone viral as friends told friends who told friends.

In early 2009, it was growing at the incredible pace of 13 per cent a month, and took just eight months to add another 100 million users by April 2009. It took only another nine months to reach 200 million users, just five months to add the next 100 million, and by September 2011 the company announced that it had registered its 800 millionth user, 40 per cent of all internet users. It is widely expected to announce reaching 1 billion users to coincide with the IPO, meaning that roughly one of every seven people on Earth is a member.

Meanwhile, Facebook continued innovating relentlessly as it sought to consolidate its primacy in the social networking scene, seeing off competitors like MySpace, Friendster, Orkut and Bebo. It has done this despite widespread criticism for convoluted privacy policies that have required users to opt out of practices that can reveal sensitive information to unintended recipients.

Users can join common interest groups, categorize their friends into lists, post unlimited photos, chat over voice calls, video or Skype, message each other via SMS or email, poke each other and 'like' a multitude of content around the web so that it shows up on their Facebook wall.

More recently, and controversially, the company unveiled plans to shift to a Timeline profile in which all posts of every user would be available for viewing.

Facebook's main competition now comes from Google+, which has racked up almost 100 million users since launching in June 2011.