Do You Know How Facebook Became Genghis Khan of Social Media?


Facebook has the maximum number of online users as compared with any other social media network. Whatsapp emerged as a great foe for facebook messenger and also was taking away the market of users who like to use social media for communication purpose only. Facebook recognized the threat and made a deal of US$19 billion to acquire Whatsapp, this transition took place on 19th February 2014. This acquisition is the considered as the largest one in the history so far for a venture-backed company. This is also a step which shows the true power of the organization called Facebook. We still have the impression of Facebook being a social media networking site but the company Facebook has become so much more than just a social media network.

In the previous article The sinister beginnings of today's social media mogul, we discussed the birth of Facebook and how it started growing with A, B and C series of investments. In the following article, we will talk about the last series(C) of investment, the acquisition of the rising competition, sales negotiations for Facebook, and what has become of Facebook now.

                                                      Facebook's Evolution to Domination


Back in 2005 Facebook had a leak of cash flow statements, which showed $5.66 million as the net gain for Facebook.

Series C occurred on 24th October 2007. This was a major turning point for Facebook as Microsoft invested $240 million in Facebook and purchased 1.6% of its shares. This gave Facebook a total value of $15 billion. The stocks Microsoft purchased had few benefits which made Microsoft as the first to be paid out of all stockholders in case the company is being sold, "liquidation preference", and gave them the rights for international adds. Soon after this Li Ka-Shing also invested $60 million in Facebook. 


Facebook for Sale.

Mark Zuckerberg has stated many times that he has no desire of selling Facebook but that hasn't stopped the negotiations. In July 2005 there were rumors of Facebook being up for sales after News Corp acquired MySpace. Mark Zuckerberg denied the rumors again. There was another report by BusinessWeek about Facebook declining $750 and raising the asking price to $2 billion back in March 2006. The bidder's name is still undisclosed. Which proves that Facebook has a price and maybe someday we might see Facebook being taken over by a larger corporation.
Yahoo also tried to negotiate on Facebook with a price as high as $1 billion in September 2006, whereas Thiel (board member of Facebook) evaluated Facebook at $8 billion. 11 months later Mark made another statement about Facebook not being up for sale and that they aren't looking for IPO anytime soon but a month later Microsoft showed interest in buying 5% of Facebook stakes for $300-$500 million. In the same month, Google also approached Facebook for investment purpose.

Money Making.

In 2008 March, Sheryl Sandberg joined Facebook as Chief Operating Officer. Sheryl with the help of Facebook staff quickly developed a strategy to make money with advertising. Sheryl's tactics paid off with positive cash flow in September 2009 for the first time. The year 2012 was one of the most successful for Facebook in terms of revenue generation. 



When Facebook went Shopping.

FriendFeed was social media competitor of Facebook and was also a real-time news aggregator which was acquired by Facebook in August 2009. FriendFeed was created by Paul Buchheit, Gmail's first engineer. That was the beginning Facebook later on acquired:
If you have not heard about Malaysian startup called Octazen solution for contact importing, it is too late because Facebook owns it now since February 2010.
Divvyshot is a photo sharing service purchased by Facebook on 2nd Aprill 2010.
Facebook paid $1 billion for acquiring Instagram, a photo sharing service, in cash and stock.
On 19th February 2014, Facebook made the most expensive deal so far for acquiring WhatsApp.

Going Public

Facebook finally on 1st February 2012 decided to go for Initial Public Offering. The goal was to achieve $5 billion. This goal was sought based on the 845 million active users per month and the statistics of likes and comments. Mark was also expected to have 57% voting shares with 22% ownership.
Facebook shares were valued at $38 each by Underwriters. Facebook changed the game by selling 25% more shares than planned. The IPO was a hit and helped Facebook raise $16 billion and due to this impact, Mark's stocks are now $19 billion.
On the other hand, Bloomberg calculated a loss of around $630 million on Facebook for retail investors since the IPO debut. The IPO has been shady for some and Wall Street's Financial Industry Regulatory Authorities are investigating if banks underwriting were biased towards selective clients and misinformed the general public.
Facebook and lawsuits are like Bonnie and Clyde. Due to this IPO controversy, they faced another lawsuit and a class action suit worth $2.5 billion.

Even though Facebook faces so many allegations and lawsuits, it keeps growing stronger and stronger each day. One of it's biggest support has been Israeli tech-startup for Content Management System called Akamai. Akamai is the backbone of Facebook and has a new head office in the United States of America now.

If we take a look at how Facebook evolved we can realize how we only used Facebook just to text our friends, share pictures at the beginning, we also learned how to share status, the emojis came, then location check-in facility, news and advertisement and many other pieces of evolution can be seen. Let's take a look at the history of Facebook's evolution from the user point of view.

We needed an invitation to join Facebook and there was still no news feed and the user had to keep looking from one profile to another to see the updated content.
26 September 2006 was the date Facebook became publicly open for everyone and this year Facebook also introduced news feed and profile activity feeds from the users.
Facebook gifts for festivals, anniversaries, birthdays etc were introduced this year to be later scrapped in 2010 but Facebook gifts were quite popular as soon as they were introduced.


Facebook at a publisher too this year and also gave access to users for adding Apps to their profiles. Publisher tool enabled users to add photos, update status, add videos or links.
This was the year of fan pages and to receive personalized information about a particular product, art, movies, bands etc. on his or her news feed.
Facebook redesigned the user profile pages and also started showing common interests between a user and their friends.

It was the year of major changes for Facebook. Ticker featured was introduced for users to share their activities and send a ticker to the people they want to share it with. Facebook also ditched the wall and introduced a timeline feature. Users were also given a subscribe button.



Facebook and controversies are like Romeo and Juliet, one can't live without the other. Facebook was also found guilty of stalking people, to know more about sinister plans and the future of Facebook check out Facebook Knows How to Control  Human Emotions and in case you have any query please leave a comment in the comment section.




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