Information Technology Reference
In-Depth Information
It is of sociological interest that some of the Facebook features such as “friend-
ing” and “unfriending” have been widely discussed and are seemingly important
to many users. There is some anxiety that “unfriending” a difficult person may
have personal repercussions.
It is also interesting that Facebook created an unusual way of hiring software
engineers. Using Facebook itself, a set of quizzes and questions was distributed,
and those who did well in solving them were recruited by Facebook.
The site's popularity continued to grow, and Facebook is now the largest photo
repository on the web, with more than 100 million images and 350 million users.
Facebook planned for an IPO in 2012. Legal problems occurred shortly before
the planned IPO when Facebook was sued by Yahoo over patent infringement. The
suit was filed on March 12, 2012.
As Facebook grew, it needed additional funding, and it received both angel in-
vestment funding and several rounds of venture capital funding. Several compan-
ies also approached Facebook about partnerships or even acquisition, including
Google, Microsoft, and Yahoo. However, Zuckerberg was cool to acquisition. The
reason additional funding was needed is because Facebook was operating at a loss.
In 2008, Facebook hired Sheryl Sandberg as Chief Operating Officer, and the
company began to plan ways of expanding revenues. Advertisements were chosen
as the optimal solution to higher revenues. This seemed to be effective, and in
2009, Facebook's revenues became positive instead of negative. Later in 2012,
Facebook had about $3.7 billion in advertising revenues and a profit of about $1
billion.
Facebook filed for an IPO on February 1, 2012. The price was set at $38 per
share. The IPO itself was May 18, 2012. At first, the IPO seemed successful be-
cause it raised $16 billion and was the third-largest IPO in U.S. history. However,
at the closing bell, the stock was only selling for $38.23. By May 25, 2012, the
stock had declined about 16.5% down to $31.91 to the dismay of early investors.
The IPO was soon followed by complaints and investigations about whether the
underwriting banks had improperly shared information with only a select few cli-
ents. The State of Massachusetts also subpoenaed Morgan Stanley over the same
issue. Several lawsuits, including class-action lawsuits, were filed. Since these
events are quite recent, the way they will turn out is not yet known.
Facebook is an interesting business case for how the web has expanded human
communications and shared the interests of millions of people in every portion of
Search WWH ::
Custom Search