I HAD just finished a panel discussion on Turkey and the Arab Spring at a
regional conference here, and, as I was leaving, a young Egyptian woman
approached me. “Mr. Friedman, could I ask you a question? Who should I vote
I thought: “Why is she asking me about Obama and Romney?” No, no, she explained.
It was her Egyptian election next week that she was asking about. Should she
vote for Mohamed Morsi, the candidate of the Islamist Muslim Brotherhood, or
Ahmed Shafiq, a retired general who served as Hosni Mubarak’s last prime
minister and was running as a secular law-and-order candidate? My heart went out
to her. As Egyptian democracy activists say: It’s like having to choose between
two diseases. How sad that 18 months after a democratic revolution, Egyptians
have been left with a choice between a candidate anchored in 1952, when Egypt’s
military seized power, and a candidate anchored in 622, when the Prophet
Muhammad gave birth to Islam.
What happened to the “Facebook Revolution”?
Actually, Facebook is having a bad week — in the stock market and the ideas
market. As a liberal Egyptian friend observed, “Facebook really helped people to
communicate, but not to collaborate.” No doubt Facebook helped a certain
educated class of Egyptians to spread the word about the Tahrir Revolution.
Ditto Twitter. But, at the end of the day, politics always comes down to two
very old things: leadership and the ability to get stuff done. And when it came
to those, both the Egyptian Army and the Muslim Brotherhood, two old “brick and
mortar” movements, were much more adept than the Facebook generation of secular
progressives and moderate Islamists — whose candidates together won more votes
than Morsi and Shafik combined in the first round of voting but failed to make
the runoff because they divided their votes among competing candidates who would
To be sure, Facebook, Twitter and blogging are truly revolutionary tools of
communication and expression that have brought so many new and compelling voices
to light. At their best, they’re changing the nature of political communication
and news. But, at their worst, they can become addictive substitutes for real
action. How often have you heard lately: “Oh, I tweeted about that.” Or “I
posted that on my Facebook page.” Really? In most cases, that’s about as
impactful as firing a mortar into the Milky Way galaxy. Unless you get out of
Facebook and into someone’s face, you really have not acted. And, as Syria’s
vicious regime is also reminding us: “bang-bang” beats “tweet-tweet” every day
of the week.
Commenting on Egypt’s incredibly brave Facebook generation rebels, the political
scientist Frank Fukuyama recently wrote: “They could organize protests and
demonstrations, and act with often reckless courage to challenge the old regime.
But they could not go on to rally around a single candidate, and then engage in
the slow, dull, grinding work of organizing a political party that could contest
an election, district by district. ... Facebook, it seems, produces a sharp,
blinding flash in the pan, but it does not generate enough heat over an extended
period to warm the house.”
Let’s be fair. The Tahrir youths were up against two well-entrenched patronage
networks. They had little time to build grass-roots networks in a country as big
as Egypt. That said, though, they could learn about leadership and the
importance of getting things done by studying Turkey’s Islamist Justice and
Development Party, known as A.K.P. It has been ruling here since 2002, winning
three consecutive elections.
What even the A.K.P.’s biggest critics will acknowledge is that it has
transformed Turkey in a decade into an economic powerhouse with a growth rate
second only to China. And it did so by unlocking its people’s energy — with good
economic management and reformed universal health care, by removing obstacles
and creating incentives for business and foreign investment, and by building new
airports, rail lines, roads, tunnels, bridges, wireless networks and sewers all
across the country. A Turkish journalist who detests the A.K.P. confessed to me
that she wished the party had won her municipal elections, because she knew it
would have improved the neighborhood.
But here’s the problem: The A.K.P.’s impressively effective prime minister,
Recep Tayyip Erdogan, has not only been effective at building bridges but also
in eliminating any independent judiciary in Turkey and in intimidating the
Turkish press so that there are no more checks and balances here. With the
economic decline of the European Union, the aborting of Turkey’s efforts to
become an E.U. member and the need for America to have Turkey as an ally in
managing Iraq, Iran and Syria, there are also no external checks on the A.K.P.’s
rising authoritarianism. (Erdogan announced out of the blue last week that he
intended to pass a law severely restricting abortions.)
So many conversations I had with Turks here ended with me being told: “Just
don’t quote me. He can be very vindictive.” It’s like China.
This isn’t good. If Erdogan’s “Sultanization” of Turkey continues unchecked, it
will soil his truly significant record and surely end up damaging Turkish
democracy. It will also be bad for the region because whoever wins the election
in Egypt, when looking for a model to follow, will see the E.U. in shambles, the
Obama team giving Erdogan a free pass and Turkey thriving under a system that
says: Give your people growth and you can gradually curb democratic institutions
and impose more religion as you like.
IT’S an old line on Wall Street: If you can get your hands on
a hot new stock, you probably don’t want it.
This bit of Street wisdom came to mind last week, as Facebook went public amid
so much fanfare.
The stock eked out a 23-cent gain on its Day 1, to $38.23. This suggests that
many professional money managers viewed all the hype as just that. Whatever the
long-term prospects of this company — an issue over which reasonable people
reasonably disagree — the idea that small-time investors might get rich fast
struck the pros as absurd.
It is true that initial public offerings have increasingly become a game for
early investors and their Wall Street enablers. Since the 1980s, average
first-day gains on new stock issues have risen steadily. According to one 2006
study, the average first-day return on I.P.O.’s in the 1980s was 7 percent. By
the mid-1990s, it was 15 percent. In the 1999-2000 dot-com boom, it was 65
We all know how that last one turned out.
It’s no coincidence that as those averages were rising, individual investors
were becoming more enamored with the stock market. The great democratization of
the equity market, which began in the 1980s, lured small investors into the
A lot of these people got burned. Academics at the Warrington College of
Business Administration at the University of Florida recently compiled a list of
about 250 companies that doubled — at least — in price on their first trading
day. Many quickly fell back to earth.
Going back to 1975, the list provides some of the greatest hits in I.P.O. land.
The top 10 first-day gainers all went public in the Internet boom. They included
VA Linux, which rose almost 700 percent, to a market capitalization of more than
$1 billion, and The Globe.com, which produced a gain of 606 percent on its first
day as a public company. Foundry Networks and WebMethods soared more than 500
Some of the companies on the list have disappeared or have been acquired. Others
are still around, to lesser and greater degrees. TheGlobe.com trades at less
than a penny a share. VA Linux is now called Geeknet and, as of Friday, had a
market value of $94 million.
Why did Facebook get a relatively slow start out of the trading gate? One
possibility is that the investment bankers who priced the stock considered the
history of private trading in the shares before the offering. Facebook was
unusual in this way, Laszlo Birinyi of Birinyi Associates pointed out last week.
“There was trading before the I.P.O., so many investors have some feel, some
idea of pricing,” he noted. Most offerings are priced based upon what the
company and its bankers guess the stock will fetch.
Indications are that Facebook was bought primarily by individual investors, not
institutions. Indeed, institutions that had invested early were big sellers in
the I.P.O. To many market veterans, this showed that the smart money was getting
out while the getting was good.
With investors still believing the advice of Peter Lynch, the former Fidelity
fund manager who told individuals to buy stocks of companies they knew as
consumers, it is easy to see why Facebook’s offering resonated with the public.
But now comes the hard part: operating as a company that returns its investors’
favors with actual earnings.
SAN FRANCISCO — Mark Zuckerberg, Facebook’s chief, has managed
to amass more information about more people than anyone else in history.
As Facebook turns to Wall Street in the biggest public offering ever by an
Internet company, it faces a new, unenviable test: how to keep growing and
enriching its hungry new shareholders.
The answer lies in what Facebook will be able to do — and how quickly — with its
crown jewel: its status as an online directory for a good chunk of the human
race, with the names, photos, tastes and desires of nearly a billion people.
Facebook’s shares are expected to begin trading as early as this week. Already,
lots of investors are scrambling to buy those shares, with giddy hopes that it
will become a big moneymaker like Google. Because of that high demand, Facebook
is expected to increase its offering price from its initial range, giving the
company a valuation possibly as high as $104 billion.
In the eight years since it sprang out of a Harvard dorm room, Facebook has
signed up users at breakneck speed, kept them glued to the site for longer
stretches of time and turned a profit by using their personal information to
customize the ads they see.
Whether it can spin that data into enough gold to justify a valuation of as much
as $104 billion remains unclear.
“We know Facebook has an awful lot of data, but what they have not worked out
yet is the most effective means of using that data for advertising,” said
Catherine Tucker, a professor of marketing at the Sloan School of Management at
the Massachusetts Institute of Technology. “They are going to have to experiment
a lot more.”
Analysts, investors and company executives can rattle off any number of
challenges facing the company. As it works to better match ads to people, it has
to avoid violating its users’ perceived sense of privacy or inviting regulatory
scrutiny. It needs to find other ways to generate revenue, like allowing people
to buy more goods and services with Facebook Credits, a kind of virtual
currency. Most urgently it has to make money on mobile devices, the window to
Facebook for more and more people.
All the while, its ability to innovate with new features and approaches — to
“break things,” in the words of Mr. Zuckerberg — may be markedly constrained
once it has investors to answer to.
“They are going to have to think about whether they can continue with the motto
‘Done is better than perfect,’ ” said Susan Etlinger, an industry analyst at the
Altimeter Group. “When you’re operating as a public company, life is very
different. We haven’t seen that play out yet. It’s going to take a few quarters
to figure out what a public Facebook is going to look like.”
Skeptics point out that the company’s revenue growth showed signs of slowing in
the first quarter of 2012. And a Bloomberg survey of 1,253 investors, analysts
and traders found that a substantial majority were dubious about the eye-popping
valuation Facebook was seeking. “It’s a risky asset. No doubt about that,” said
Brian Wieser, of Pivotal Research Group. “Google was less risky.” No matter. Mr.
Wieser says he thinks that Facebook is worth $83 billion and that its revenue
will grow by at least 30 percent for the next five years.
The comparisons to Google are inevitable. When that company went public in 2004,
there were so many doubters that the company lowered its offering price to $85 a
share. It closed at just over $100 on the first day of trading, and now sells
for more than $600. Facebook is farther along than Google was in terms of
revenue, having brought in nearly $4 billion last year, or $5.11 a user,
compared with Google’s $2 billion in 2003.
One Facebook investor, who spoke on the condition of anonymity because of market
regulations as the offering draws near, noted that when Google went public it
already had a clear business strategy. By contrast, he described Facebook this
way: “They have built an incredibly valuable asset — as opposed to a business
they have executed well.”
The most pressing issue for Facebook executives may be the mobile challenge.
Already, over half of Facebook’s 901 million users access the site through
mobile devices. In regulatory filings, the company says mobile use is growing
fastest in some of Facebook’s largest markets, including the United States,
India and Brazil. Facebook goes on to acknowledge that it makes little to no
money on mobile and that “our ability to do so successfully is unproven.”
There is not much space on mobile screens to show advertisements. And Google and
Apple, two of Facebook’s biggest rivals, control the basic software on most
smartphones, which could make it harder for the company to make inroads there.
Facebook’s response to this challenge so far has been to aggressively acquire
companies focused on mobile, including Instagram, for which it paid $1 billion
in April. But it warned in a revision to its offering documents last week that
the mobile shift meant it was adding users faster than it was increasing the
number of ads it displayed.
What Facebook already has — more than any other digital company — is a
spectacularly rich vault of information about its users, who cannot seem to stay
away from the site. Americans, on average, now spend 20 percent of their online
time on Facebook alone, thanks to the ever-growing menu of activities the
company has introduced, from playing games to sampling music to posting pictures
of baby showers and drunken escapades. Some 300 million photos are uploaded to
the site daily.
How Facebook exploits its users’ information — and how those users react — is
the next reckoning. David Eastman, worldwide digital director for the
advertising agency JWT, said Facebook would need to give marketers more data
about what kinds of users click on what kinds of advertising, and about their
travels on the Internet before and after they click on an ad. Most brands want
to have a presence on Facebook, he said, but they do not quite understand who
sees their pitches and whether they lead to greater sales.
“They need to make the data work more,” Mr. Eastman said. “They need to provide
deeper data. Right now the value of Facebook advertising is largely unknown.”
While the bulk of Facebook’s revenue comes from North America, it is banking on
international growth. The company has expanded its global footprint so rapidly
that four out of five Facebook users are now outside the United States. It is
the dominant social network in large emerging markets like Brazil and India,
though it shows no signs of penetrating China — where it would face not only
government censorship but stiff competition from homegrown social networks.
Mr. Zuckerberg, who has studied Mandarin, signaled his ambitions to crack the
vast Chinese market as far back as 2010. He suggested that Facebook would first
try to advance deeper into markets like Russia and Japan before it took on a
country as “complex” as China.
With international growth comes international regulatory headaches. Facebook
already faces audits in Europe on whether the company is living up to promises
made to consumers about how it uses their data — and now, a stringent new data
protection law. In India, it has been sued for spreading offensive content. And
in the United States, it faces privacy audits by the Federal Trade Commission
for the next 20 years. In its offering documents, Facebook repeatedly warns of
legislative and regulatory scrutiny over user privacy, “which may adversely
affect our reputation and brand.”
Maintaining brand loyalty is excruciatingly difficult in the Internet business.
Across Silicon Valley, investors are plotting the next big thing in social
networks. Already, the clock may be ticking for Facebook.
“There is no consumer-facing Internet brand or site that ever keeps consumers’
attention for more than 10 years,” said Tim Chang, a managing director at
Mayfield Fund. “It is not hard to imagine that in 10 years, people are going to
be off of Facebook even.”
Mr. Zuckerberg has an answer to that. In the video for investors released this
month, Mr. Zuckerberg hinted at the ambitions he had for the company. Facebook,
in his vision, will hook itself into the rest of the Web, making itself
indispensable. Already Facebook serves as a de facto Internet passport, allowing
users to log in with their Facebook identities and explore millions of other Web
sites and applications.
“I think that we’re going to reach this point where almost every app that you
use is going to be integrated with Facebook in some way,” Mr. Zuckerberg says in
the video. “We make decisions at Facebook not optimizing for what is going to
happen in the next year, but what’s going to set us up for this world where
every product experience you have is social, and that’s all powered by
Facebook, seeking to address concerns about the personal
information it collects on its users, said Thursday that it would provide any
user with more about the data it tracks and stores.
In a posting on its privacy blog, Facebook said the expanded archive feature
would be introduced gradually to its 845 million monthly active users. It goes
beyond the first archive made available in 2010, which has been criticized as
incomplete by privacy advocates and regulators in Europe.
The archive Facebook published two years ago gave users a copy of their photos,
posts, messages, list of friends and chat conversations. The new version,
Facebook said, includes previous user names, friend requests and the Internet
protocol addresses of the computers that users have logged in from. More
categories of information will be made available in the future, Facebook said.
Online social networks offer free services to users and make money primarily
through advertising, which can often be directed more effectively using the
information the network has collected on them.
Facebook, which is preparing for an initial public stock offering, most likely
in May, has been trying to accommodate government officials in Europe, where
privacy laws are more stringent than in the United States.
Facebook’s data collection practices have tested the boundaries of Europe’s
privacy laws. The social networking site, based in Menlo Park, Calif., is
Europe’s leading online network, according to comScore, a research firm in
In December, the Irish Data Protection Commission reached an agreement with
Facebook, which runs its international businesses from offices in Dublin, to
provide more information to its users and amend its data protection practices.
“We took up their recommendation to make more data available to Facebook users
through this expanded functionality,” the company said in a statement.
Facebook agreed to make those changes by July. In Europe, 40,000 Facebook users
have already requested a full copy of the data that the site has compiled on
each of them, straining the company’s ability to respond. Under European privacy
law, the company must comply with the requests within 40 days.
Max Schrems, the German law student who filed the complaint leading to the
agreement with the Irish authorities, criticized Facebook’s latest offer as
“We welcome that Facebook users are now getting more access to their data, but
Facebook is still not in line with the European Data Protection Law,” said Mr.
Schrems, a student at the University of Vienna. “With the changes, Facebook will
only offer access to 39 data categories, while it is holding at least 84 such
data categories about every user.”
In 2011, Mr. Schrems requested his own data from Facebook and received files
with information in 57 categories. The disclosure, Mr. Schrems said, showed that
Facebook was keeping information he had previously deleted from the Web site,
and was also storing information on his whereabouts, gleaned from his computer’s
Facebook’s data collection practices are being scrutinized in Brussels as
European Union policy makers deliberate on changes to the European Data
Protection Directive, which was last revised in 1995. The commissioner
responsible for the update, Viviane Reding, has cited Facebook’s data collection
practices in pushing for a requirement that online businesses delete all
information held on individuals at the user’s request.
Ulrich Börger, a privacy lawyer with Latham & Watkins in Hamburg, said he
thought it was unlikely that the European Union would enact laws that would
significantly restrict the use of customized advertising, which is at the core
of the business model for Web sites like Facebook. It is more likely, Mr. Börger
said, that lawmakers would require Facebook and other networking sites to revise
their consent policies to make them more easy to understand. But it was unlikely
that Facebook would be legally prevented from using information from individuals
who sign up for the service.
“I don’t see any fundamental change,” Mr. Börger said. “It comes back to the
question of consent. They cannot go so far as to prohibit things that people are
willing to consent to. That would violate an individual’s freedom to receive
services they want to receive.”
The New York Times
By JENNA WORTHAM
Balcomb quit Facebook after a chance encounter on an elevator. He found himself
standing next to a woman he had never met — yet through Facebook he knew what
her older brother looked like, that she was from a tiny island off the coast of
Washington and that she had recently visited the Space Needle in Seattle.
“I knew all these things about her, but I’d never even talked to her,” said Mr.
Balcomb, a pre-med student in Oregon who had some real-life friends in common
with the woman. “At that point I thought, maybe this is a little unhealthy.”
As Facebook prepares for a much-anticipated public offering, the company is
eager to show off its momentum by building on its huge membership: more than 800
million active users around the world, Facebook says, and roughly 200 million in
the United States, or two-thirds of the population.
But the company is running into a roadblock in this country. Some people, even
on the younger end of the age spectrum, just refuse to participate, including
people who have given it a try.
One of Facebook’s main selling points is that it builds closer ties among
friends and colleagues. But some who steer clear of the site say it can have the
opposite effect of making them feel more, not less, alienated.
“I wasn’t calling my friends anymore,” said Ashleigh Elser, 24, who is in
graduate school in Charlottesville, Va. “I was just seeing their pictures and
updates and felt like that was really connecting to them.”
To be sure, the Facebook-free life has its disadvantages in an era when people
announce all kinds of major life milestones on the Web. Ms. Elser has missed
engagements and pictures of new-born babies. But none of that hurt as much as
the gap she said her Facebook account had created between her and her closest
friends. So she shut it down.
Many of the holdouts mention concerns about privacy. Those who study social
networking say this issue boils down to trust. Amanda Lenhart, who directs
research on teenagers, children and families at the Pew Internet and American
Life Project, said that people who use Facebook tend to have “a general sense of
trust in others and trust in institutions.” She added: “Some people make the
decision not to use it because they are afraid of what might happen.”
Ms. Lenhart noted that about 16 percent of Americans don’t have cellphones.
“There will always be holdouts,” she said.
Facebook executives say they don’t expect everyone in the country to sign up.
Instead they are working on ways to keep current users on the site longer, which
gives the company more chances to show them ads. And the company’s biggest
growth is now in places like Asia and Latin America, where there might actually
be people who have not yet heard of Facebook.
“Our goal is to offer people a meaningful, fun and free way to connect with
their friends, and we hope that’s appealing to a broad audience,” said Jonathan
Thaw, a Facebook spokesman.
But the figures on growth in this country are stark. The number of Americans who
visited Facebook grew 10 percent in the year that ended in October — down from
56 percent growth over the previous year, according to comScore, which tracks
Ray Valdes, an analyst at Gartner, said this slowdown was not a make-or-break
issue ahead of the company’s public offering, which could come in the spring.
What does matter, he said, is Facebook’s ability to keep its millions of current
users entertained and coming back.
“They’re likely more worried about the novelty factor wearing off,” Mr. Valdes
said. “That’s a continual problem that they’re solving, and there are no
Erika Gable, 29, who lives in Brooklyn and does public relations for
restaurants, never understood the appeal of Facebook in the first place. She
says the daily chatter that flows through the site — updates about bad hair days
and pictures from dinner — is virtual clutter she doesn’t need in her life.
“If I want to see my fifth cousin’s second baby, I’ll call them,” she said with
Ms. Gable is not a Luddite. She has an iPhone and sometimes uses Twitter. But
when it comes to creating a profile on the world’s biggest social network, her
tolerance reaches its limits.
“I remember having MySpace for a bit and always feeling so weird about seeing
other people’s stuff all the time,” she said. “I’m not into it.”
Will Brennan, a 26-year-old Brooklyn resident, said he had “heard too many
horror stories” about the privacy pitfalls of Facebook. But he said friends are
not always sympathetic to his anti-social-media stance.
“I get asked to sign up at least twice a month,” said Mr. Brennan. “I get
harangued for ruining their plans by not being on Facebook.”
And whether there is haranguing involved or not, the rebels say their
no-Facebook status tends to be a hot topic of conversation — much as a decision
not to own a television might have been in an earlier media era.
“People always raise an eyebrow,” said Chris Munns, 29, who works as a systems
administrator in New York. “But my life has gone on just fine without it. I’m
not a shut-in. I have friends and quite an enjoyable life in Manhattan, so I
can’t say it makes me feel like I’m missing out on life at all.”
But the peer pressure is only going to increase. Susan Etlinger, an analyst at
the Altimeter Group, said society was adopting new behaviors and expectations in
response to the near-ubiquity of Facebook and other social networks.
“People may start to ask the question that, if you aren’t on social channels,
why not? Are you hiding something?” she said. “The norms are shifting.”
This kind of thinking cuts both ways for the Facebook holdouts. Mr. Munns said
his dating life had benefited from his lack of an online dossier: “They haven’t
had a chance to dig up your entire life on Facebook before you meet.”
But Ms. Gable said such background checks were the one thing she needed Facebook
“If I have a crush on a guy, I’ll make my friends look him up for me,” Ms. Gable
said. “But that’s as far as it goes.”
has been revised
to reflect the following correction:
Correction: December 13, 2011
An earlier version of this article
misstated the percentage of Americans
not have cellphones, as estimated by the Pew Internet
and American Life Project.
It is 16 percent, not 5 percent.
Thu, Dec 8
By Alexei Oreskovic and Sarah McBride
FRANCISCO (Reuters) - Traveling to space or embarking on an expedition to
excavate lost Mayan ruins are normally the stuff of adventure novels.
But for employees of Facebook, these and other lavish dreams are moving closer
to reality as the world's No. 1 online social network prepares for a blockbuster
initial public offering that could create at least a thousand millionaires.
The most anticipated stock market debut of 2012 is expected to value Facebook at
as much as $100 billion, which would top just about any of Silicon Valley's most
celebrated coming-out parties, from Netscape to Google Inc.
While weak financial markets could postpone or downsize any IPO, even the most
conservative market-watchers say Facebook seems destined to set a new benchmark
in a region famous for minting fortunes, with even the rank-and-file employees
reaping millions of dollars.
Facebook employees past and present are already hatching plans on how to spend
their anticipated new wealth, even as securities regulations typically prevent
employee stock options from being cashed in until after a six-month lock-up
"There's been discussions of sort of bucket list ideas that people are putting
together of things they always wanted to do and now we'll be able to do it,"
said one former employee who had joined Facebook in 2005, shortly after it was
He is looking into booking a trip to space that would cost $200,000 or more with
Virgin Galactic or one of the other companies working on future space tourism.
That's chump change when he expects his shares in Facebook to be worth some $50
"If that IPO bell happens, then I will definitely put money down," said the
person, who declined to be identified because he did not want to draw attention
to his financial status, given the antiglitz ethos of many people in Silicon
Valley. "It's been a childhood dream," he said of space travel.
Others are thinking less science fiction and more "Indiana Jones." A group of
current and former Facebook workers has begun laying the groundwork for an
expedition to Mexico that sounds more suited to characters from the Steven
Spielberg film "Raiders of the Lost Ark" than to the computer geeks famously
portrayed in the movie about Facebook, "The Social Network."
Initially, the group wanted to organize its own jungle expedition to excavate a
relatively untouched site of Mayan ruins, according to people familiar with the
matter who also did not want to court notoriety by being identified in this
story. After some debate earlier this year, they are now looking at partnering
with an existing archeological program.
Founded in a Harvard dorm room in 2004 by Mark Zuckerberg and his friends,
Facebook has grown into the world's biggest social network with over 800 million
members and revenue of $1.6 billion in the first half of 2011.
Information about its ownership structure or employee compensation packages is
hard to come by, since the still-private company discloses very little. Facebook
declined to comment for this story.
It is clear that Facebook's earliest employees, who were given ownership stakes,
and early venture capital investors -- such as Accel Partners, Greylock Partners
and Paypal co-founder Peter Thiel -- will see the biggest paydays. Zuckerberg,
27, is estimated to own a little over a fifth of the company, according to "The
Facebook Effect" author David Kirkpatrick.
But the wealth will trickle down to engineers, salespeople and other staffers
who later joined the company, since most employees receive salary plus some kind
of equity-based compensation, such as restricted stock units or stock options.
Facebook's headcount has swelled from 700 employees in late 2008 to more than
3,000 today. Given its generous use of equity-based compensation in past years,
people familiar with Facebook say that even by conservative estimates there are
likely to be well over a thousand people looking at million-dollar-plus paydays
after the company goes public.
"There will be thousands of millionaires," said a former in-house recruiter at
Facebook, who did not want to be identified because of confidentiality
Lou Kerner, the head of private trading at Liquidnet, estimates that Facebook
now has roughly 2.5 billion shares outstanding, which would translate to a
per-share price of $40 at a $100 billion valuation.
Engineers are the most richly rewarded among the rank and file. The former
Facebook recruiter said as recently as 2009, the company gave an engineer with
15 years experience options to buy about 65,000 shares at around $6 per share.
After a 5-for-1 stock split in October 2010, the engineer would now have the
right to buy around 325,000 shares. Assuming a $40 share price, that would yield
a profit of more than $12 million.
According to another former Facebook employee, it was not unusual for the
company to offer some executive-level hires up to 100,000 restricted shares as
recently as three years ago.
The company has since cut back on equity compensation for new hires. Managers
hired one year ago received 2,000 to 30,000 restricted shares depending on the
job function, according to another recruiter who had also worked for Facebook.
The company has also been stingier in handing out equity to noncore employees --
so there may not be as many of the dazzling rags-to-riches stories that were
commonplace at the time of the Google IPO, when in-house chefs and at least one
masseuse struck gold with options.
Facebook has its share of chefs -- including head chef Josef Desimone who was
lured away from Google -- and other support staff, but it's not clear how many
of them were awarded share options.
These days, "Google and Facebook are notorious for hiring contract employees
they don't have to give equity to," said the second former Facebook recruiter.
Facebook's IPO has been long anticipated, but veterans of other startups that
have gone public say the period after could be fraught with new challenges.
Some employees could grow jealous over colleagues with more stock, while others
might look down on peers who are too quick to sell, questioning their loyalty to
And there is always the risk that talented staff would leave with their newfound
wealth to make their own mark in the technology world by becoming entrepreneurs
or investing in other promising startups.
Some Facebook employees have already left the company to do that, selling their
shares ahead of the IPO on private exchanges such as those run by SecondMarket
One such person is engineer Karel Baloun, who joined the social network in 2005
and left just over a year later to start his own online network for
commodities-futures traders, funded by a tidy package of stock options. It
failed and Baloun laments that he could have made a lot more money if he had
stayed at Facebook.
But he is philosophical, saying that the equity windfall gave him the cushion to
do new things.
"It's really wonderful being able to choose your work based on the meaning of
it, not the size of your salary," said Baloun, now chief technology officer at
mobile-commerce company Leap Commerce. "I have two kids, and I couldn't do it if
I didn't have some savings from this IPO."
Baloun said he has sold about half his Facebook shares and is holding on to the
rest until after the IPO. "I will buy a house," he said.
For many of Facebook's staffers, the IPO will provide the means to pay off
school loans and buy a house or new car. Home prices in the San Francisco Bay
Area have typically been lofty, but many homeowners and real-estate agents are
eagerly anticipating a surge of new buyers flush with money from the IPOs of
Facebook and other Web companies.
"Watch for Facebook proceeds to buy Palo Alto real estate," said David Cowan, a
venture capitalist at Bessemer Venture Partners who backed social network
LinkedIn Corp, among other companies.
Wealth managers and investment advisers are also looking to win new clients from
the Facebook crowd.
"A lot of them are going to be multimillionaires at 30 and live to be 100. That
means creating a 70-year plan, which is unheard of," said John Valentine of
Valentine Capital Asset Management in San Ramon, California, noting that his
average client plan spans about 35 years.
Valentine, whose firm manages about $600 million in assets, said he plans to
break into the Facebook client base through connections with venture capital
firms, and he has meetings set the next two weeks to leverage those
relationships. "It's the hot ticket in Silicon Valley," he said of Facebook.
David Arizini, managing director of Constellation Wealth Advisors, has several
current and former Facebook employees as clients and hopes they refer more of
But he knows that it will take time and work to win them over for his firm, a
New York and Menlo Park-based wealth manager with about $4.5 billion in assets
"They are very skeptical of the financial services industry largely because of
what has transpired over the last three years," he said. "So the bulk of clients
interviewed five to 10 advisers before they made their choice."
The imminent flood of Facebook dollars is sure to provide a welcome boost to
local businesses in Silicon Valley, from high-end car dealerships to wine
Buff Giurlani, founder of car and wine storage service AutoVino in Menlo Park,
is looking forward to an acceleration in already-brisk trade. "If a Facebook guy
buys a house and wants to remodel it, maybe the contractor will buy another
car," he said. "Maybe the realtor will put a car in. There's a trickle-down
For Facebook's younger staffers, who favor jeans and T-shirts over designer
suits, the shopping sprees will almost certainly involve computers and
"Start packing pepper spray for your next trip to the Apple store," said
Bessemer Venture's Cowan.
Sarah McBride and Alexei Oreskovic,
reporting by Ashley Lau and Jilian Mincer,
The New York Times
By SOMINI SENGUPTA and BEN SISARIO
FRANCISCO — Facebook, the Web’s biggest social network, is where you go to see
what your friends are up to. Now it wants to be a force that shapes what you
watch, hear, read and buy.
The company announced new features here on Thursday that could unleash a torrent
of updates about what you and your Facebook friends are doing online: Frank is
watching “The Hangover,” Jane is listening to Jay-Z, Mark is running a race
wearing Nike sneakers, and so forth. That in turn, Facebook and its dozens of
partner companies hope, will influence what Frank and Jane and Mark’s friends
Facebook, in short, aims not to be a Web site you spend a lot of time on, but
something that defines your online — and increasingly offline — life.
“We think it’s an important next step to help tell the story of your life,” said
Mark Zuckerberg, Facebook’s chief executive, who introduced the new features at
the company’s annual conference for developers. He called what Facebook was
doing an effort to “rethink some industries.”
Facebook’s moves sharpen the battle lines between the social networking giant
and Google, the search giant, because Facebook is trying to change the way
people find what they want online. Searching the Web is still the way most
people discover content — whether it is news, information about wedding
photographers or Swiss chard recipes. Facebook is trying to change that: in
effect, friends will direct other friends to content. Google has its own social
network product in Google+, but it is far behind Facebook.
“This is two big rivals getting into each others’ backyards,” said Sean
Corcoran, an analyst with Forrester Research. “It changes the game for what
social networks have been doing. What Facebook is saying is, we are your life
online, and also how you discover and share.”
Facebook is not becoming a purveyor of media products, like Apple or Amazon.com.
Rather, it is teaming up with companies that distribute music, movies,
information and games in positioning itself to become the conduit where news and
entertainment is found and consumed. Its new partners include Netflix and Hulu
for video, Spotify for music, The Washington Post and Yahoo for news,
Ticketmaster for concert tickets and a host of food, travel and consumer brands.
For companies that distribute news and entertainment, a partnership with
Facebook can draw eyeballs and subscribers, though it still remains unclear
exactly how much more revenue a Facebook friend recommendation can generate.
Music industry analysts said the new Facebook offerings stand to improve the
prospects of new media companies like the music service Spotify, which already
has two million users worldwide. But they also pose a challenge to the biggest
music seller of all: iTunes from Apple, which has added social features that
have gained little traction.
For Facebook, the potential payoff is huge, especially as it seeks to make
itself more valuable in advance of a possible public offering. A new feature
called Timeline lets users post information about their past, like weddings and
big vacations. And everywhere on the site, users will be able to more precisely
signal what they are reading, watching, hearing or eating. This will let
Facebook reap even more valuable data than it does now about its users’ habits
and desires, which in turn can be used to sell more fine-tuned advertising.
How users will react to the new features remains to be seen. The site’s
evolution could make it easier for them to decide how to spend their time and
money. But it could also potentially allow them to shut out alternative
viewpoints and information that is not being shared among their set of friends.
And not everyone wants to rely on their friends to shape their cultural
discoveries. “Some of my friends have pretty awful taste in music,” said
Alexander White, whose Colorado-based Next Big Sound tracks social media
responses for artists and record labels. “It’s one filter. Its not the be-all,
As of May, Americans spent more time with Facebook than with the next four
largest Web brands combined, according to Nielsen. Erik Brynjolfsson, a
professor of management at the M.I.T. Sloan School of Management, described
Facebook as “sort of a walled garden” that, for better or worse, can
increasingly filter every other activity on the Internet.
“As Facebook becomes more and more synonymous with the Internet experience, that
is going to benefit Facebook shareholders,” Mr. Brynjolfsson said. “Facebook has
been very successful in getting the lion’s share of people’s time and attention.
Their challenge in the coming years is to convert that dominance in time and
attention into a bigger share of consumer wallets — a bigger share of money they
spend either directly on Facebook or indirectly through advertising.”
Other Internet giants have enviable assets of their own. Google has a mountain
of data based on how people search. Amazon knows plenty about what you might
want to buy, based on what you’ve bought. But no other technology company has
Facebook’s treasure trove of social data. It has 800 million users, half of whom
return to the site every day, and it also has the information they reveal about
themselves, sometimes unwittingly. With it, Facebook has the ability to leverage
peer pressure at a grand scale.
Facebook executives describe their efforts as upending the traditional model of
marketing. Rather than just helping people buy what they need, they aim to
curate what they might want.
Its partnership with Zynga, maker of the popular game FarmVille, illustrates how
Facebook can leverage its platform. The alliance has been enormously lucrative
for both companies. Whether that model can be replicated with movies, music, or
even news remains to be seen.
Still, Facebook has become unavoidable for the entertainment business. Hollywood
increasingly realizes the power of peer recommendations to sell movies and
television shows; some in the industry call this the “killer gateway.”
Studios have long looked at Facebook as an important marketing tool, setting up
pages for characters and movies. They have also been experimenting with offering
full movies on the site. Warner Brothers, Miramax and Lions Gate Entertainment
have all allowed Facebook users to watch movies they have paid for with
Facebook’s virtual currency, called Credits.
Now the studios are hoping the Facebook platform will let them connect even more
directly with customers — to grab a Facebook user’s attention by telling her
that her friend has watched a particular television show.
Netflix wants to allow subscribers to watch its video on Facebook. But its plans
face a stumbling block in Washington. A law called the Video Privacy Protection
Act prohibits the release of information about what movies a person is renting.
That law would have to be lifted in the United States.
The changes raise a fundamental challenge for Facebook: can it be all things to
everyone? Some of its users want to share with a small group of friends, while
others want to be completely open. And there are users who complain about the
trivia that sometimes seems to flood the site.
“Facebook wants to be omnipresent in the Web experience by adding commerce,
video and mail to their early successes with news feeds and picture tagging,”
said Jodee Rich, founder of People Browsr, based in San Francisco, which
analyzes data from social networks. “Trying to be all things to all people was
the undoing of Microsoft and AOL. If Facebook continues to overreach, they will
contributed reporting from Los Angeles
The New York Times
By BEN SISARIO
cloud-based digital music services like Spotify and Rhapsody, which stream
millions of songs but have struggled to sign up large numbers of paying users,
being friended by Facebook could prove to be a mixed blessing.
This week, according to numerous media and technology executives, Facebook will
unveil a media platform that will allow people to easily share their favorite
music, television shows and movies, effectively making the basic profile page a
primary entertainment hub.
Facebook, which has more than 750 million users, has not revealed its plans, but
the company is widely expected to announce the service at its F8 developers’
conference in San Francisco on Thursday.
By putting them in front of millions of users, Facebook’s new platform could
introduce the music services to vast new audiences. “If it works the way it is
supposed to, it would be the nirvana of interoperability,” said Ted Cohen, a
consultant and former digital executive for a major label.
But the new plan will ratchet up the competitive pressure on these fledgling
services, forcing them to offer more free music as enticements to new users.
According to the media and technology executives, who spoke on condition of
anonymity because the deals were private, Facebook has made agreements with a
number of media companies to develop a way for a user’s profile page to display
whatever entertainment he is consuming on those outside services. Links that
appear on a widget or tab, or as part of a user’s news feed, would point a
curious friend directly to the content.
Spotify and Rhapsody, along with their smaller competitors Rdio, MOG and the
French company Deezer, are said to be among the 10 or so music services that
will be part of the service at its introduction; Vevo, the music video site, is
another. A Facebook spokesman declined to comment, and media executives
cautioned that details of the plan could change.
Spotify is the largest of these services with more than 10 million users,
according to its most recent reporting. The service began in Europe in 2008 and
arrived in the United States in July, after protracted negotiations with the
major record labels over its “freemium” structure, which lets people listen to
music free, with advertising, or pay $5 or $10 a month for an ad-free version.
Rdio and MOG, which charge $5 and $10 a month for subscriptions, announced free
versions last week in an effort to compete with Spotify. And Rhapsody, whose
service costs $10 and $15 a month, has just introduced an array of social
features centered on Facebook.
The companies declined to answer questions about Facebook’s media platform. And
David Hyman, MOG’s founder and chief executive, said that the development of his
company’s free tier far predated Spotify’s entry into the United States.
But Mr. Hyman said that the change was being made to reduce the “friction” a
nonsubscriber experiences when following a link posted by a paying user. Instead
of hearing the song, the nonsubscriber would reach a page asking to sign up with
a credit card — an annoyance for many potential customers.
“In the Internet world, any minuscule piece of friction blows people’s minds,”
MOG provides new users with a “gas tank” of free music — supported by
advertising — that increases with that user’s social activity on the site, like
sharing playlists or inviting friends. Rdio’s free music will come ad-free.
Neither company would say exactly how much free music would be made available.
“We don’t want to force you to look at or listen to ads that will distract you
from enjoying music,” said Carter Adamson, Rdio’s chief operating officer, “and
we don’t want you to spam your friends to get more free.”
But even free music requires royalty payments to record companies — typically
some fraction of a cent per stream — and some investors and technology
executives are concerned that Facebook’s platform may bring in large numbers of
users who are willing to listen to some free music but are not being given much
incentive to subscribe. That might make success more difficult for services that
have less favorable deals with record companies.
David Pakman, a partner in the venture capital firm Venrock and a former chief
executive of the digital service eMusic, also said that instead of giving
smaller companies a boost, the mathematics of Facebook’s hundreds of millions of
links might simply allow the largest service to dominate all the others.
“It favors the big over the small,” Mr. Pakman said. “It’s a good thing for all
services in that it lets them all participate. But the small guys will lose
network effects, and the big guys will gain it.”
Spotify has not updated its user numbers since arriving in the United States,
but music executives say it quickly drew more than 100,000 customers to its paid
MOG and Rdio have not reported their numbers, but music executives say their
tallies are well under 100,000.
Not all the services involved in the Facebook platform are going free. Rhapsody,
which was founded 10 years ago and has 800,000 subscribers, is sticking to its
monthly subscription rate, said Jon Irwin, the company’s president.
“Our belief is that the cost of the content cannot be fully offset by the
advertising dollars you can generate,” Mr. Irwin said, “and that the subsequent
conversion of somebody to a paying subscriber because they’ve been able to
listen to content for free on a desktop is not at a level that supports the
losses you’ll incur on the advertising side.”
Mr. Irwin also believes that Facebook will further intensify the competition
among the cloud services, and that Spotify and his own company will have the
“It’s going to be hard for the players not at scale to survive,” he said.
“You’re looking at a two-horse race.”
The New York Times
By JENNIFER PRESTON
Carolina diet doctor has come up with a formula to create the most highly
engaged audience on Facebook in the world, far surpassing marketing efforts by
celebrities and sports teams. He draws on the words of Jesus and posts them four
or five times a day.
The doctor, Aaron Tabor, 41, grew up watching his father preach at churches in
Alabama and North Carolina, and his Facebook creation is called the Jesus Daily.
He started it in April 2009, he said, as a hobby shortly after he began using
Facebook to market his diet book and online diet business that includes selling
soy shakes, protein bars and supplements.
For the last three months, more people have “Liked,” commented and shared
content on the Jesus Daily than on any other Facebook page, including Justin
Bieber’s page, according to a weekly analysis by AllFacebook.com, an industry
blog. “I wanted to provide people with encouragement,” said Dr. Tabor, who keeps
his diet business on a separate Facebook page. “And I thought I would give it a
news spin by calling it daily.”
Facebook and other social media tools have changed the way people communicate,
work, find each other and fall in love. While it’s too early to say that social
media have transformed the way people practice religion, the number of people
discussing faith on Facebook has significantly increased in the last year,
according to company officials.
Over all, 31 percent of Facebook users in the United States list a religion in
their profile, and 24 percent of users outside the United States do, Facebook
says. More than 43 million people on Facebook are fans of at least one page
categorized as religious.
Much of the conversation on social platforms is fostered by religious leaders,
churches, synagogues and other religious institutions turning to Facebook,
Twitter and YouTube to attract followers and strengthen connections with
members. What is new is that millions of people are also turning to Facebook
pages, like the Jesus Daily, created by people unaffiliated with a religious
leader or a specific house of worship. With 8.2 million fans, the Jesus Daily
counted 3.4 million interactions last week, compared with about 630,000
interactions among Justin Bieber’s 35 million fans, the AllFacebook.com analysis
shows. The Bible Facebook page, run by the United Bible Societies in Reading,
England, has eight million fans and also beat Mr. Bieber with about a million
Amid pages for Lady Gaga, Texas Hold’em Poker and Manchester United, Joyce Meyer
Ministries is in the top 20, along with another page devoted to Jesus Christ,
and the Spanish-language page Dios Es Bueno, or God Is Great. And Facebook got
its first Bible-themed game recently, the Journey of Moses.
But the increase in the number of people finding faith communities via social
media platforms provokes the question of what constitutes religious experience
and whether “friending” a church online is at all similar to worshiping at one.
Although Pope Benedict acknowledged in a recent statement that social networks
offered “a great opportunity,” he warned Roman Catholics that “virtual contact
cannot and must not take the place of direct human contact with people at every
level of our lives.”
The Rev. Henry G. Brinton, senior pastor of the Fairfax Presbyterian Church in
Fairfax, Va., who writes a blog and whose church uses Facebook, said that it was
important for people to gather to “experience the physical sensation of water in
Baptism, the chance to hold hands in a service of worship or greet one another
in the passing of the peace.”
That’s not possible through online worship alone, he said. “I am not saying
there isn’t value to the connections that get made through social networking.
But they can never replace the importance of people being together physically in
the service of worship.”
Perhaps the biggest opportunity for religious leaders and institutions is
finding and keeping new members, according to the Rev. Kenneth Lillard, author
of “Social Media and Ministry: Sharing the Gospel in the Digital Age.” He said
Facebook and other social media tools, including Google Plus, YouTube and
Twitter, represented the best chance for religious leaders to expand their
congregations since the printing press helped Martin Luther usher in the
“I am looking at social media doing the same thing for today’s church,” said Mr.
Lillard, a Baptist minister from Maryland.
Since making a focused effort to use social media three years ago, Rabbi Laura
Baum, of the Congregation Beth Adam in Cincinnati, said the synagogue had
reached thousands of people around the world and significantly expanded the
number of people participating in Shabbat services on Friday evenings. They
offer readings and services via live videos on Facebook, allowing Jews from all
over the world to join in prayer and in conversation on Facebook, Twitter or
“There are some people who will always prefer the in-person, face-to-face
experience, who love being in a room with other Jews and smelling the freshly
baked challah. And some people will prefer being online,” said Rabbi Baum, 31,
who is one of the leaders of OurJewishCommunity.org. “There are those people who
prefer to check out our tweets on their phone or listen to our podcast. I don’t
think the use of technology needs to be for everybody. But we have found a
community online. Many of them have never felt a connection to Judaism before.”
For some, the Jesus Daily has become a faith community online, where people
share their troubles and provide and receive words of support. “Jesus Daily
reminds me every day that I am not alone,” said Kristin Davis-Ford, a single
mother and full-time student in Houston. “Every single prayer request I have
posted has been answered,” she said, “and I know it is the power of God’s
children, coming together and standing in agreement.”
Dr. Tabor, a medical researcher, drafts most of the posts himself, using some
marketing techniques learned from his successful diet business, which he now
pitches on QVC. He recently posted photographs of baby animals, asking people to
name “God’s Little Helpers.” By noon, more than 147,000 people had “Liked” the
post. And names for the baby animals were among the more than 7,000 comments,
including this one from Steve Karimi, writing from Nakuru, the provincial
capital of Kenya’s Rift Valley province: “I love Jesus Daily. Truly
Dr. Tabor is not sure what the future holds for the page, he said, mentioning an
online television global ministry. For now, it is still his hobby.
“I want it to be about encouragement,” he said. “There are so many people
battling cancer, fighting to keep their marriages together, struggling to
restore relationships with their children,” he said. “There are people out of
work, at the end of the line and I just want the Jesus Daily to be a central
place where they find encouragement, no matter what battle they are fighting.”
The New York Times
By CURTIS SITTENFELD
Sittenfeld is the author of the novels “Prep” and “American Wife.”
YOU may not
have heard it, but the death knell of Facebook sounded about a month ago — more
precisely, on Thursday, Aug. 4, around 8 p.m. Central time. It wasn’t because
the Web site’s growth slowed this past spring and the number of users shrank in
the United States. It wasn’t because of the advent of Google+. It was because I,
the latest of late adopters, finally joined. My embrace of the site can only
mean that it’s officially passé.
It’s not that I was a Facebook snob — in fact, the opposite. I’ve always
understood how the site could be a place to while away the hours, and if I could
have joined when I was single, I’m sure I would have Facebook-stalked with the
best of them. But now I’m a married 36-year-old, I have two children under the
age of 3, and I’m bad enough at responding to e-mails, or doing anything else
that involves organization or time management, without the temptation of seeing
what’s become of my elementary school classmates.
Facebook is only one of many major cultural trends that have bypassed me in
recent years: I’m still planning to watch “The Wire,” read the “Twilight”
series, and maybe even play that Angry Birds game I keep hearing so much about.
But if I’m being honest, the time suck wasn’t the biggest reason I avoided
joining for so long. The biggest reason was that I didn’t know which me would
join. Apparently, Mark Zuckerberg believes we should all be the same in every
context. According to Time’s 2010 Person of the Year profile of him, he once
told a journalist, “Having two identities for yourself is an example of a lack
of integrity.” To which my only response is, You’ve got to be kidding. I mean,
I’m not even the same person with all the members of my immediate family. And
I’ve long thought that my impulse to act differently with, say, my friend from
grad school and my husband’s aunt — to adjust my personality to fit the
situation and the other person — is an example of good manners, not bad ones.
I’m not under the illusion that all my selves are equally appealing, though, and
this was where I got confused to the point of paralysis. Would my profile
reflect Professional Writer Curtis (upbeat, friendly, responsible) or Real
Curtis (disagreeable, slovenly, judgmental)? Would I use it to hawk my books, or
to post pictures of my baby eating her toes? I know the obvious answer is both,
but — call me old-fashioned — that just feels completely weird.
I didn’t resolve this identity confusion before joining, but my desire to be a
part of things finally overrode my skittishness. On a rare evening when both my
children had gone to sleep and my husband was outside reading, I opened a
thank-you note for a present I’d sent to my high school friend Tanya. She’d
gotten married in early June, and unfortunately, I’d missed the wedding. In her
note, she included a photo of herself and her new husband and mentioned that
she’d recently seen my brother, P. G., in New York.
And I thought, Tanya and P. G., who lives in Ohio, saw each other and I had no
idea? And, Tanya and her husband looked so great and happy that I really wanted
to see more pictures from their wedding. I had a strong suspicion that I knew
where to find them.
This was not, of course, the first time that not being on Facebook had made me
feel as if I lived under a rock. In spring 2010, I received e-mails from two
friends announcing the births of their babies, and I hadn’t known either woman
was pregnant, even though I was a bridesmaid in one of their weddings. (One
e-mail began, “For those of you who we are not in touch with by cellphone, or
Facebook. ...”) Last August, my friend Jesse told me that not being on Facebook
was just plain rude. And I finally believed him a few months later when some
other friend’s baby was born prematurely, and my wish to track the baby’s
progress meant I had to directly e-mail the parents, which surely was an
imposition on them. This March, when a woman who runs a moms’ Meetup group I’d
taken part in sent out an e-mail suggesting that we shift to communicating via
Facebook since we were all on it, I had the rather pathetic sensation of chasing
on foot after a pack of people riding bikes. Wait up, ladies! I wanted to call
out. Hold on! Not all of us!
And so I signed up. I admit that as I did, I entertained fantasies that I would
be the billionth person to join and would be given shares of Facebook stock,
though if this was the case, I haven’t yet been notified.
So far, life is not all that different. As of this writing, I have 111 friends,
which I’m aware is a bit on the meager side. Seventeen are my relatives, 12 are
people I haven’t spoken to in 20 years, and 9 are friends of friends I’ve never
I have posted nothing except an author photo because I continue to feel that
confusion over how private, or not, to be. Enjoying other peoples’ comments and
photos while not providing any of my own feels a little unsporting, but a
late-adopting leopard can’t change her spots overnight. In the meantime, I’ve
learned that my friend Annie’s 3-year-old son came home from camp in another
kid’s underwear, that my former landlord’s daughter is taking piano lessons with
a new teacher, and that my brother has 5,000 friends.
I’ve also had the satisfaction of shocking a few people with friend requests. My
sister Tiernan wrote, “Is this really you?” My friend Jynne posted on my wall
that she thought my 2-year-old must have gotten hold of my laptop. And two
people told me they were pretty sure we’re all supposed to move on to Google+
now, which sounds about right. I’m hoping to be there by 2020.
FRANCISCO | Tue Jun 28, 2011
By Alexei Oreskovic
FRANCISCO (Reuters) - Google Inc, frustrated by a string of failed attempts to
crack social networking, is taking another stab at fending off Facebook and
other hot social sites with a new service called Google Plus.
Google designed the service, unveiled on Tuesday, to tie together all of its
online properties, laying the foundation for a full-fledged social network. It
is the company's biggest foray into social networking since co-founder Larry
Page took over as chief executive in April.
Page has made social networking a top priority at the world's No. 1 Internet
search engine, whose position as the main gateway to online information could be
at risk as people spend more time on sites like Facebook and Twitter.
Google Plus, now available for testing, is structured in remarkably similar
fashion to Facebook, with profile pictures and newsfeeds forming a central core.
However, a user's friends or contacts are grouped into very specific circles of
their choosing, versus the common pool of friends typical on Facebook.
Enticing consumers to join another social networking service will not be easy,
said Rory Maher, an analyst with Hudson Square Research.
"They're going to have an uphill battle due to Facebook's network effects," said
Maher, citing the 700 million users that some research firms say are currently
on Facebook's service.
"The more users they (Facebook) get, the harder it gets for Google to steal
those," he said. But he added that Google's popularity in Web search and email
could help it gain a following.
To set its service apart from Facebook, Google is betting on what it says is a
better approach to privacy -- a hot-button issue that has burned Facebook, as
well as Google, in the past.
Central to Google Plus are the so-called "circles" of friends and acquaintances.
Users can organize contacts into different customized circles -- family members,
co-workers or college friends, say -- and share photos, videos or other
information only within those groups.
"In the online world there's this 'share box' and you type into it and you have
no idea who is going to get that, or where it's going to land, or how it's going
to embarrass you six months from now," said Google Vice President of Product
Management Bradley Horowitz.
"For us, privacy isn't buried six panels deep," he added.
Facebook, which has been criticized for confusing privacy controls, introduced a
feature last year that lets users create smaller groups of friends. Google,
without mentioning Facebook by name, said other social networking services'
attempts to create groups have been "bolt-on" efforts that do not work as well.
Google Plus will be rolled out to a limited number of users in what the company
is calling a field trial. Only those invited to join will initially be able to
use the service. Google did not say when it would be more widely available.
The service does not currently feature advertising.
Google's stock has been pressured by concerns about rising spending within the
company and increasing regulatory scrutiny -- not to mention its struggles with
social networking. The U.S. Federal Trade Commission, among others, is currently
reviewing its business practices.
Its shares are down almost 20 percent this year after underperforming the market
To create Google Plus, the company went back to the drawing board in the wake of
several notable failures, including Google Wave and Google Buzz, a microblogging
service whose launch was marred by privacy snafus.
"We learned a lot in Buzz, and one of the things we learned is that there's a
real market opportunity for a product that addresses people's concerns around
privacy and how their information is shared," said Horowitz.
Google, with $29 billion in revenue last year, drew more than 1 billion visitors
worldwide to its websites in May, more than any other company, according to Web
analytics firm comScore. But people are spending more time on Facebook: The
average U.S. visitor spent 375 minutes on Facebook in May, compared with 231
minutes for Google.
Google Plus seems designed to make its online properties a pervasive part of the
daily online experience, rather than being spots where Web surfers occasionally
check in to search for a website or check email.
As with Facebook's service, Google Plus has a central Web page that displays an
ever-updating stream of the comments, photos and links being shared by friends
A toolbar across the top of most of Google's sites -- such as its main search
page, its Gmail site and its Maps site -- allows users to access their
personalized data feed. They can then contribute their own information to the
Google Plus will also offer a special video chat feature, in which up to 10
people can jump on a conference call. And Google will automatically store photos
taken on cell phones on its Internet servers, allowing a Google Plus user to
access the photos from any computer and share them.
When asked whether he expected people to switch from Facebook to Google Plus,
Google Senior Vice President of Engineering Vic Gundotra said people may decide
to use both.
"People today use multiple tools. I think what we're offering here offers some
very distinct advantages around some basic needs," he said.
PALO ALTO, Calif | Wed Apr 20, 2011
By Jeff Mason
PALO ALTO, Calif (Reuters) - President Barack Obama sought to reignite the
youthful energy that propelled his 2008 election Wednesday with a campaign-style
visit to the nexus of social communications, Facebook.
Democrats acknowledge that Obama will need to rally many of the same forces that
propelled him into the White House in order to win re-election in 2012: an army
of young, energetic voters as well as a sizable showing from independent voters.
By visiting Facebook headquarters in California's Silicon Valley, where
26-year-old founder Mark Zuckerberg is a folk hero, Obama sought to connect to
tens of millions of people who have adopted social media as a prime method of
"My name is Barack Obama and I'm the guy who got Mark to wear a jacket and tie,"
the president said, to laughter, at the beginning of a live-streamed town hall
event with Zuckerberg.
Zuckerberg, dressed in jeans, sneakers and a tie, and Obama, dressed in a
business suit, then took off their jackets before the president started fielding
questions about how to reduce the budget deficit, which is projected to hit $1.4
trillion this fiscal year.
Promoting his plan of spending cuts and tax increases for the wealthiest
Americans, Obama told the rich Facebook founder that both of them would have to
pay more taxes to help out.
"I'm cool with that," Zuckerberg said.
Obama heads to San Francisco for Democratic fund-raising events after the
He then plans stops in Las Vegas and Los Angeles before returning to Washington
Jon Krosnick, a political science professor at Stanford University, said having
Obama on stage with Zuckerberg could help the president with young people.
"That alone is a way of trying to re-energize this young generation that might
be crucial for him to be re-elected again," Krosnick said.
Obama held his deficit-cutting roadshow as policy-makers and financial markets
recover from ratings agency Standard & Poor's threat to downgrade America's
triple-A credit rating on worries Washington won't address its fiscal woes.
A potential Republican challenger to Obama, former Massachusetts Governor Mitt
Romney, said S&P "downgraded the Obama presidency" and that Obama should meet
with S&P officials to try to gain their confidence.
DEEPENING ECONOMIC PESSIMISM
It is early in the 2012 election cycle, but Obama has much work ahead. An ABC
News/Washington Post poll released on Tuesday showed Obama's approval ratings
near record lows because of deepening economic pessimism among Americans.
Ipsos pollster Cliff Young said rising gasoline prices are taking their toll but
they probably did not present a long-term problem for Obama, who he called the
Obama is using the first steps on the road to 2012 to promote a budget ideology
that is at odds with the fiscal views of Republicans who are planning
He wants to raise taxes on wealthier Americans to fund social programs while
making some budget cuts, a plan he says would bring down deficits by $4 trillion
over 12 years.
Republican Representative Paul Ryan has called for slightly higher cuts, $4.4
trillion over 10 years, without raising taxes. He would make deep cuts in
spending, including overhauls in the Medicare and Medicaid health programs for
the elderly and poor that Democrats say would violate the "social compact" with
Obama said Ryan's plan was "fairly radical" and that his budget proposal was not
"Nothing is easier than solving a problem on the backs of people who are poor or
people who are powerless or don't have lobbyists or don't have clout," he said
Polls suggests Americans so far are siding with Obama.
Data released from the ABC News/Washington Post poll on Wednesday said 72
percent of those surveyed favor higher taxes for wealthy Americans and 78
percent opposed to cutting health benefits for the elderly. The survey of 1,001
adults has a 3.5 percentage point error margin.
February 14, 2011
The New York Times
By JENNIFER PRESTON
With Facebook playing a starring role in the revolts that
toppled governments in Tunisia and Egypt, you might think the company’s top
executives would use this historic moment to highlight its role as the platform
for democratic change. Instead, they really do not want to talk about it.
The social media giant finds itself under countervailing pressures after the
uprisings in the Middle East. While it has become one of the primary tools for
activists to mobilize protests and share information, Facebook does not want to
be seen as picking sides for fear that some countries — like Syria, where it
just gained a foothold — would impose restrictions on its use or more closely
monitor users, according to some company executives who spoke on the condition
of anonymity because they were discussing internal business.
And Facebook does not want to alter its firm policy requiring users to sign up
with their real identities. The company says this requirement protects its users
from fraud. However, human rights advocates like Susannah Vila, the director of
content and outreach for Movements.org, which provides resources for digital
activists, say it could put some people at risk from governments looking to
ferret out dissent.
“People are going to be using this platform for political mobilization, which
only underscores the importance of ensuring their safety,” she said.
Under those rules, Facebook shut down one of the most popular Egyptian Facebook
protest pages in November because Wael Ghonim, a Google executive who emerged as
a symbol of the revolt, had used a pseudonym to create a profile as one of the
administrators of the page, a violation of Facebook’s terms of service.
With Egypt’s emergency law in place limiting freedom of speech, Mr. Ghonim might
have put himself and the other organizers at risk if they were discovered at
that time. Activists scrambled to find another administrator to get the page
back up and running. And when Egyptian government authorities did figure out Mr.
Ghonim’s role with the Facebook page that helped promote the Jan. 25 protest in
Tahrir Square, he was imprisoned for 12 days.
Last week, Senator Richard J. Durbin, Democrat of Illinois, urged Facebook to
take “immediate and tangible steps” to help protect democracy and human rights
activists who use its services, including addressing concerns about not being
able to use pseudonyms.
In a letter to Mark Zuckerberg, Facebook’s chief executive, Mr. Durbin said the
recent events in Egypt and Tunisia had highlighted the costs and benefits of
social tools to democracy and human rights advocates. “I am concerned that the
company does not have adequate safeguards in place to protect human rights and
avoid being exploited by repressive governments,” he wrote.
Elliot Schrage, the vice president for global communications, public policy and
marketing at Facebook, declined to discuss Facebook’s role in the recent tumult
and what it might mean for the company’s services.
In a short statement, he said: “We’ve witnessed brave people of all ages coming
together to effect a profound change in their country. Certainly, technology was
a vital tool in their efforts but we believe their bravery and determination
Other social media tools, like YouTube and Twitter, also played major roles in
Tunisia and Egypt, especially when the protests broke out. But Facebook was the
primary tool used in Egypt, first to share reports about police abuse and then
to build an online community that was mobilized to join the Jan. 25 protests.
In recent weeks, Facebook pages and groups trying to mobilize protesters have
sprung up in Algeria, Bahrain, Morocco and Syria. Hashtags on Twitter have also
helped spread the protests, which extended to Algeria over the weekend and to
Bahrain, Iran and Yemen on Monday.
“This is an incredible challenge and an incredible opportunity for Facebook,
Twitter and Google,” said Ethan Zuckerman, a senior researcher at the Berkman
Center for Internet and Society at Harvard, where he works on projects about the
use of technology and media in the developing world. “It might be tougher for
Facebook than anyone else. Facebook has been ambivalent about the use of their
platform by activists.”
Unlike Vodafone and other telecommunications carriers, which often need
contracts and licenses to operate within countries, Facebook and other social
networks are widely available around the world (except in countries like China,
Saudi Arabia and Iran, which have restricted access) and encourage the free flow
of information for anyone with access to the Internet.
In a speech that Secretary of State Hillary Rodham Clinton is scheduled to
deliver Tuesday, she will once again emphasize that Internet freedom is an
inalienable right. In recent weeks, the State Department has been sending out
Twitter updates in Arabic and began sending updates in Persian over the weekend.
Twitter and YouTube, which is owned by Google, have been more willing to embrace
their roles in activism and unrest, Mr. Zuckerman said.
After the Internet was shut down in Egypt, Twitter and Google actively helped
protesters by producing a new service, speak2tweet, that allowed people to leave
voice mail messages that would be filed as updates on Twitter. Biz Stone, one of
Twitter’s founders, used it as an opportunity to emphasize the positive global
impact that comes with the open exchange of information.
When the Internet was back up, YouTube, working with Storyful, a social media
news curation service, took the thousands of videos pouring in from the protests
in Tahrir Square to help people retrieve and share the information as quickly as
possible on CitizenTube, its news and politics channel.
Facebook has taken steps to help protesters in Tunisia after government
officials used a virus to obtain local Facebook passwords this year. The company
rerouted Facebook’s traffic from Tunisia and used the breach to upgrade security
last month for all of its more than 550 million users worldwide; at the same
time, it was careful to cast the response as a technical solution to a security
problem. There are about two million Facebook users in Tunisia and five million
Debbie Frost, a spokeswoman for Facebook, said the company was not considering
changing its policy requiring users to use their real identities, which she says
leads to greater accountability and a safer environment.
“The trust people place in us is the most important part of what makes Facebook
work,” she said, adding that the company welcomed a discussion with Mr. Durbin
and others who have an interest in this matter. “As demonstrated by our response
to threats in Tunisia, we take this trust seriously and work aggressively every
single day to protect people.”
Mr. Durbin has urged Facebook to join the Global Network Initiative, a voluntary
code of conduct for technology companies, created in 2008, that requires
participating businesses to take reasonable steps to protect human rights.
Andrew Rasiej, founder of the Personal Democracy Forum, said that the people and
companies behind the technology needed to be more transparent about what
information they collect, and that they needed to develop consistent policies to
allow people to opt in or out of their data collection systems. “We must have a
right to protect the privacy of information stored in the cloud as rigorously as
if it were in our own home,” he said.
February 9, 2011
The New York Times
By JENNIFER PRESTON
The Syrian government began allowing its citizens Wednesday to
openly use Facebook and YouTube, three years after blocking access to Facebook
and other sites as part of a crackdown on political activism. Human rights
advocates greeted the news guardedly, warning that the government might have
lifted the ban to more closely monitor people and activity on social networking
The move comes just weeks after human rights activists in Egypt used Facebook
and other social media tools to help mobilize tens of thousands of people for
antigovernment protests. Activists in Tunisia used the Internet in December and
January to help amass support for the protests and revolt that toppled the
government of Zine el-Abidine Ben Ali.
After the mass demonstrations began in Egypt, opposition groups in Syria created
a Facebook page called the Syrian Revolution and started a Twitter campaign
calling on people to join “day of rage” rallies last week against President
Bashar Assad. But the effort, which has generated more than 16,000 Facebook
members, did not produce the street protesters that organizers had hoped for.
Despite the ban, many Syrians had been able to use Facebook and other aspects of
the Web restricted by the government through proxy servers that allowed people
to circumvent the Syrian government’s firewall, which also blocks Wikipedia,
Amazon, Blogspot and Israeli newspapers, among other sites.
Posts on the wall on Wednesday reflected a variety of opinions, including
reminders for people to be careful about what they post to bold proclamations
that the page would help spur change. “We’re going to launch a fearless attack,”
one user wrote on the Syrian Revolution Facebook page wall. “Link to us on all
pages so that all Syrians can see this. Think. Initiate. Decide, do and have
faith in God.”
Syria’s decision was welcomed by officials from the State Department with a note
of caution, given the country’s restrictions on the freedom of speech and
freedom to assemble.
“We welcome any positive steps taken to create a more open Internet, but absent
the freedoms of expression and association, citizens should understand the
risks,” said Alec J. Ross, senior adviser for innovation to Secretary of State
Hillary Rodham Clinton, who helped organize a delegation of business leaders
from technology companies to meet with Mr. Assad in Syria last year. In those
meetings, the business leaders said that opening the Web would be important to
Susannah Vila, director of content and outreach for Movements.org, said she
believed that the government in Syria, in releasing controls on the Internet,
was trying to make it appear as if it were making democratic concessions after
the tumult in Egypt and Tunisia.
“While access to social media sites presents an opportunity for Syrians to
better mobilize one another, it also makes it easier for the government to
identify activists and quash protests,” said Ms. Vila, of the New York
City-based organization that began in 2008 with the mission to help support
advocates and activists using technology. Ms. Vila said there was growing
concern that the government of Sudan was closely monitoring Facebook users there
after lifting restrictions.
Abdulsalam Haykal, a leading Syrian technology entrepreneur, praised the Syrian
government’s decision as a reflection of a commitment to build confidence with
the country’s young people. “The power of social media is an important tool for
increasing participation, especially by engaging young people,” he said.
Under Facebook’s terms of service, users are required to use their real
identities and not hide behind false or anonymous accounts, a violation that can
lead to Facebook’s closing an account.
Debbie Frost, a spokeswoman for Facebook, said Wednesday that the company was
not considering changing or re-examining its terms of service in those countries
where some users were concerned about revealing their full identity for security
“Facebook has always been based on a real-name culture,” she said. “This leads
to greater accountability and a safer and more trusted environment for our
users. It’s a violation of our policies to use a fake name or operate under a
false identity.” Ms. Frost said the company provided multiple options for users
to communicate privately through groups and to read updates on a Facebook page
without having to sign up for it.
Ms. Frost said that the company had always seen some traffic for Syria, but not
the number of Facebook users typical in a country, like Syria, with high
Internet usage. She said the company did not see significant changes in traffic
Wednesday. Syrian technology companies reported that it could take hours or days
for people to get full access.
A spokesperson for YouTube declined to comment on the lifting of the ban, but
pointed to Google’s Transparency report, which shows a jump in traffic to
YouTube.com from Syria.
According to D-Press, a pro-government Syrian Web site, there are about 200,000
Syrians currently using Facebook.
February 7, 2011
The New York Times
By DAVID D. KIRKPATRICK and JENNIFER PRESTON
CAIRO — In a tearful, riveting live television interview only
two hours after his release from an Egyptian prison, the Google executive Wael
Ghonim acknowledged Monday that he was one of the people behind the anonymous
Facebook and YouTube campaign that helped galvanize the protest that has shaken
Egypt for the last two weeks.
Since he disappeared on Jan. 28, Mr. Ghonim, 30, has emerged as a symbol for the
protest movement’s young, digital-savvy organizers. During the interview on a
popular television show, he said he had been kidnapped and held blindfolded by
Afterward, hundreds of Egyptians took to Twitter and the Internet, calling on
him to become one of their new leaders.
“Please do not make me a hero,” Mr. Ghonim said in a voice trembling with
emotion, and later completely breaking down when told of the hundreds of people
who have died in clashes since the Jan. 25 protests began. “I want to express my
condolences for all the Egyptians who died.”
“We were all down there for peaceful demonstrations,” he added. “The heroes were
the ones on the street.”
Mr. Ghonim rejected the government’s assertions that the protests had been
instigated by foreigners or the Muslim Brotherhood, the banned Islamist
opposition group. “There was no Muslim Brotherhood presence in organizing these
protests,” he said. “It was all spontaneous, voluntary. Even when the Muslim
Brotherhood decided to take part it was their choice to do so. This belongs to
the Egyptian youth.”
The release of Mr. Ghonim, who oversees marketing efforts for Google in the
Middle East and North Africa, comes as the government is trying to portray Egypt
as returning to business as usual. But in the interview, Mr. Ghonim described
the experience of what he called his extralegal “kidnapping” and imprisonment to
rally the public to continue their protests. “It is a crime,” he said, “This is
what we are fighting.”
Ending the mystery over who helped begin the social media campaign that inspired
the protests, Mr. Ghonim said that he was a creator of the We are All Khaled
Said Facebook page. That page and multiple videos uploaded on YouTube about Mr.
Said, a 28-year-old Egyptian man beaten to death by the police in Alexandria on
June 6, 2010, helped to connect human rights organizers with average Egyptians
and to raise awareness about police abuse and torture.
Mr. Ghonim, an Egyptian who lives in Dubai with his wife and two children, was
not well known outside of technology and business circles in Egypt. But his
disappearance, followed by his interview Monday night on the same program where
the Nobel laureate and diplomat Mohamed ElBaradei plunged into Egyptian politics
a year ago, appeared to have quickly turned him into a national celebrity.
Mr. Ghonim, who came across as both humble and fearless, said he was grabbed by
security police officers while getting into a taxi and then taken to a location
where he was detained for 12 days, blindfolded the entire time. He said that he
was deeply worried that his family did not know where he was. He said he was not
The first word of his release came when he posted this sentence in English on
his Twitter account at 7:05 p.m.:
“Freedom is a bless that deserves fighting for it.”
Google then confirmed the news. “It is a huge relief that Wael Ghonim has been
released,” the company said in a message posted on Twitter and then released in
an e-mail. “We send our best wishes to him and his family.”
Since last June, the Khaled Said Facebook page has attracted more than 473,000
members and has become a tool not only for organizing the protests but also for
providing regular updates about other cases of police abuse. But the page’s
creator remained a mystery.
“We did not know who he was,” said Aida Seif el-Dawla, a human rights advocate
and professor of psychiatry who works with El Nadeem Center for Rehabilitation
of Victims of Violence and Torture in Cairo. The center became involved in Mr.
Said’s case last June after police officials presented autopsy reports saying
that he died of asphyxiation from swallowing drugs rather than the brutal
beating witnessed by several people.
She said many young people identified with Mr. Said and were outraged by his
death and how the police had handled it. She said that there were many Facebook
pages, but that it was the page that Mr. Ghonim started that gained momentum.
“It was the most popular,” she said. “It gave a space for the young people to
interact with each other and to plan together.”
The Facebook page published cellphone photographs from the morgue showing the
horrific injuries Mr. Said had suffered, YouTube videos contrasting his smiling
face with the morgue photos and witness accounts that disputed the initial
Egyptian police version of his death. The information helped lead to prosecutors
arresting two police officers in connection with Mr. Said’s death. It also
prompted Facebook members to attend both street and silent protests several
times since last June.
In addition to his work at Google, Mr. Ghonim had served as a technology
consultant for Mr. ElBaradei’s pro-democracy campaign.
Before his family lost contact with him, Mr. Ghonim had posted an ominous
message on Twitter that troubled friends and family, raising concerns about his
whereabouts: “Pray for #Egypt. Very worried as it seems that government is
planning a war crime tomorrow against people. We are all ready to die #Jan25.”
While friends and family searched hospitals in the area for him, several human
rights activists became convinced that he was being held by the authorities for
his role in the social media efforts and for inspiring some of the young protest
organizers to use those media to help promote the protests.
Last Friday, members of the April 6 Youth Movement Facebook page, a group of
young advocates who began using Facebook in early 2008 to raise awareness about
labor strikes and human rights abuses, announced that they had designated Mr.
Ghonim their spokesman.
Habib Haddad, a Boston-based businessman and a friend of Mr. Ghonim’s, said he
spoke to Mr. Ghonim’s wife after her husband’s release on Monday. “Not sure I
ever heard someone that happy and emotional,” Mr. Haddad posted on his Twitter
Mr. Ghonim was among many in Egypt who have disappeared during the revolt.
“At this point, Wael has become a symbolic figure,” said Mr. Haddad. “Moving
forward, it is going to be his personal decision if he were to embrace this
symbolic figure or not. As a friend, I care mostly about his personal safety and
his family’s safety.”
December 30, 2010
The New York Times
By MIGUEL HELFT
SAN DIEGO — Some people go to court hoping to win millions of dollars. Tyler
and Cameron Winklevoss have already won tens of millions. But six years into a
legal feud with Facebook, they want to give it back — for a chance to get more.
The Winklevosses — identical twins and Harvard graduates — say that they, along
with another Harvard student, Divya Narendra, had the original idea for
Facebook, and that Mark Zuckerberg stole it. They sued Facebook and Mr.
Zuckerberg in 2004, and settled four years later for $20 million in cash and $45
million in Facebook shares.
They have been trying to undo that settlement since, saying they were misled on
the value of the deal. But it has not been an easy decision.
As recently as Thursday, the brothers considered dropping their effort to unwind
the agreement, and went as far as drafting a statement to that effect, according
to people close to the case. They decided, though, to keep fighting.
Their argument is that Facebook deceived them about the value of the shares,
leaving them with far less than they had agreed. Whatever their value at the
time of the deal, Facebook’s shares have soared since, putting the current worth
of the settlement, by some estimates, at more than $140 million.
Next month, the twins and Mr. Narendra plan to ask a federal appeals court in
San Francisco to undo the deal so they can pursue their original case against
Facebook and Mr. Zuckerberg, and win a richer payday. They could, though, lose
Still, they say it’s not about the money, it’s about the principle — and
“The principle is that they didn’t fight fair,” said Tyler Winklevoss during an
interview at a pub here recently. “The principle is that Mark stole the idea.”
His brother, Cameron, chimed in, “What we agreed to is not what we got.”
Facebook denies it did anything improper and says the Winklevosses simply suffer
from a case of “settlers remorse.”
To make matters more complicated, the twins are also at war with the lawyers who
helped them win the settlement. The brothers fired them, accused them of
malpractice and refused to pay them. A judge recently found for the lawyers, and
ordered the twins to pay the 20 percent contingency fee, or $13 million. For
now, the money and shares remain in an escrow account.
Yet their battle with Mr. Zuckerberg is what has had them riled up. When they
talked about him, and told their version of the founding of Facebook, they
helped finish each other’s sentences, easily reciting every last detail of a
tale they have evidently told time and again.
“It shouldn’t be that Mark Zuckerberg gets away with behaving that way,” Cameron
The company declined to make Mr. Zuckerberg available for an interview, and
Andrew Noyes, a spokesman, said Facebook would have no comment “beyond was is
already in our appellate briefs.” In the past, Mr. Zuckerberg has denied he
stole the Facebook idea from the Winklevosses, saying they planned a dating
site, not a social network.
The twins, who are 29, recently told portions of their story in a “60 Minutes”
interview for CBS. They grew up in affluence in Greenwich, Conn., were varsity
rowers at Harvard and competed in the Summer Olympics in Beijing in 2008. They
now live here in San Diego, where they are training for the 2012 London
They are as physically striking and imposing as they appeared in the film, “The
Social Network, where they were portrayed by one actor, Armie Hammer. They are
6-foot-5 , and their frames are lean and muscular, shaped by years of rowing.
For the interview, they wore hoodies and jeans, and only the variation in the
hoodies — one zippered with a Ron Jon Surf Shop emblem, one a pullover with a
Quicksilver logo — helped to tell them apart.
As they talked about the Facebook case, no detail was too small to omit, from
where they first met Mr. Zuckerberg (the Kirkland House dining room) to the
layout of Mr. Zuckerberg’s dorm room, to the content of the e-mails he had sent
them after they asked him to do computer programming for a Web site called
Harvard Connection. They recited arcane facts about the valuation of private
companies and even quoted from the Securities Act of 1934, which they say
Facebook violated when it drew up the settlement.
In addition to a bigger payday, the twins say they want a court to reconsider
their original claims about Facebook’s founding, pointing to instant messages on
the subject sent by Mr. Zuckerberg to various friends. The messages have come to
light since the brothers signed the deal. But they say Facebook executives and
board members have known about the messages since 2006, and played dirty by
concealing them when they negotiated the settlement.
“If you take all those documents, it is a dramatically different picture,” Tyler
Facebook declined to comment on the messages. In prior interviews, Mr.
Zuckerberg said he had regretted sending some of them.
While the Winklevosses could end up losing their settlement, the risks for
Facebook are high as well. If the court unwinds the agreement, the company will
have to decide whether to offer them a richer settlement or face a trial. Recent
trades on a private exchange suggest that Facebook, which is not a public
company, now is worth around $50 billion, and the company may not want the
negative publicity associated with a trial, especially if it decides to move
forward with a stock offering.
The roots of the original dispute date to 2003, when Mr. Zuckerberg, then a
Harvard sophomore, said he would help the Winklevosses and Mr. Narendra program
Harvard Connection, later renamed ConnectU. But Mr. Zuckerberg delayed work on
Harvard Connection, and when pressed for answers, stalled, according to the
Winklevosses. In February 2004 he released TheFacebook, which eventually became
After ConnectU and its founders sued, Facebook countersued in 2005.
The settlement, which gave Facebook ownership of ConnectU, was supposed to
resolve all claims.
The details of the new dispute, which erupted almost immediately, are less
known, in part because the parties reached the settlement after a confidential
mediation. But according to court documents, the parties agreed to settle for a
sum of $65 million. The Winklevosses then asked whether they could receive part
of it in Facebook shares and agreed to a price of $35.90 for each share, based
on an investment Microsoft made nearly five months earlier that pegged
Facebook’s total value at $15 billion. Under that valuation, they received 1.25
million shares, putting the stock portion of the agreement at $45 million.
Yet days before the settlement, Facebook’s board signed off on an expert’s
valuation that put a price of $8.88 on its shares. Facebook did not disclose
that valuation, which would have given the shares a worth of $11 million. The
ConnectU founders contend that Facebook’s omission was deceptive and amounted to
They refuse to say how much they would ask for in a new negotiation, but they
said that based on the lower valuation, they should have received roughly four
times the number of shares. At today’s price, that would give the settlement a
value of more than $500 million.
In its brief, the company says it was under no obligation to disclose the $8.88
valuation, which was available in public filings. Facebook describes it as one
of many that it received and as “immaterial” to the calculations of ConnectU
founders and their battery of lawyers and advisers.
“There was no chance that that one valuation would have affected the decision of
these sophisticated investors and their entourage of advisers,” Facebook wrote
in its brief.
In marketplaces that match buyers and sellers of the shares of privately held
companies, Facebook’s shares have soared to more than $100 in recent trades,
after adjusting for stock splits.
So far, Facebook’s arguments have won the day in multiple court rulings.
The brothers are hoping for better luck next month, before the United States
Court of Appeals for the Ninth Circuit. Unless they decide to give up.
Last year, the Winklevoss brothers completed coursework for a masters in
business administration at Oxford. Cameron helped to start Guestofaguest.com, a
Web site that offers information about “people, places and parties” in New York,
Los Angeles and the Hamptons.
“We are moving forward and trying to be productive individuals,” Cameron said.
When asked if they could have turned ConnectU into a site with hundreds of
millions of users, like Mr. Zuckerberg did with Facebook, the twins replied in
unison, “Absolutely.” They added that Mr. Zuckerberg deserved some credit for
“not screwing up” and expanding Facebook into a community of 500 million users.
But they believe the fame and fortune is undeserved.
Tyler Winklevoss said: “Mark is where he is because we approached him to include
him in our idea.”
Networking sites used to spread pictures and appeals
in bid to find answers to
missing architect's whereabouts
Saturday 25 December 2010
This article was published on guardian.co.uk at 20.59 GMT on Saturday 25
The search for Joanna Yeates triggered an unprecedented
campaign using social networks. Colleagues and friends of the 25-year-old set up
a website dedicated to looking for her.
Users could download posters of the landscape architect to print and put up in
windows, watch CCTV footage of Ms Yeates as she left Tesco Express after buying
a pizza on the night of her disappearance, and sign up to a Twitter campaign.
Users of Facebook were also asked to replace their own profile picture with one
of Ms Yeates. In the picture she is seen holding the black-and-white cat Bernard
that she and her boyfriend Greg Reardon bought last year.
Her best friend, Rebecca Scott, spoke to her as she made her way home from a
Bristol pub on Friday, 17 December – she was the last known person to talk to
her. "We are desperate to find her," Ms Scott told reporters. "This is totally
out of character for Jo."
Ms Yeates studied landscape design and horticulture at Writtle Agricultural
College, Essex, before taking a master's degree at Winchester University.
Earlier this month she celebrated the second anniversary of her relationship
with Mr Reardon, who is 27 and a fellow landscape architect.
The couple recently moved in together and shared a one-bedroom rented Clifton
flat where – last Sunday – Mr Reardon discovered her handbag, keys, mobile phone
and coat but no sign of his girlfriend. He had spent the weekend with his family
in Sheffield and was expecting to find her at their flat. Police were alerted –
48 hours after she had last been seen by friends.
On the Friday in question, Ms Yeates had spent the early evening with colleagues
from the Building Design Partnership, for which she worked, at the Ram pub in
Park Street, near the city centre. She left at 8pm and shortly afterwards phoned
Ms Scott. The pair arranged to meet for Christmas Eve drinks. Then Ms Yeates
stopped at Tesco Express in Clifton village where she bought a pizza. The
receipt was found in the flat, but there was no sign of the pizza or its
packaging. Later Chief Inspector Gareth Bevan, of Avon and Somerset police, was
photographed holding a Tesco Finest tomato, mozzarella and basil pesto pizza,
like the one bought by Ms Yeates. "Does anyone know where this is?" he asked the
Last Thursday, Ms Yeates's parents issued a harrowing appeal for information
about their daughter. "I have got to believe that she's alive. If the
inevitable… if it turns out she isn't, I still want her back. I still want to
hold her one last time," David Yeates told reporters. He also appealed to any
abductor. "If you have, if she is dead, then please tell somebody where she is."
Teresa Yeates said: "I sometimes picture her, if she had for some reason
collapsed or been discarded and if she was alive in all the snow and the cold. I
just can't bear the thought of it."
Mr Reardon said: "She was my future. This Christmas was going to be our first
together. We were going to head up to Scotland for New Year's Eve. She was
really looking forward to Christmas. We had put up a tree." On the weekend of
her disappearance, Ms Yeates had been planning to bake for a party that the
couple would have held last Tuesday.
Her brother Chris handed out leaflets and put up posters around Bristol in the
hope of someone coming forward with new information. On Friday he said the
family was "in complete despair".
Ms Yeates was also remembered during midnight mass at Christ Church in Clifton
and on Christmas Eve churchgoers across Bristol prayed for her safe return.
Tonight the website (
www.helpfindjo.wordpress.com ) set up for Jo Yeates carried a link to the
story of the discovery of a woman's body and stressed that there had been no
confirmation of the identity of the woman. "This will be a terrible day, no
matter who the young lady is," it concludes. "Please save a thought for those
who will not be having a merry Christmas."
December 12, 2010
The New York Times
By MIGUEL HELFT
PALO ALTO, Calif. — Mark Zuckerberg, the co-founder and chief
executive of Facebook, likes to say that his Web site brings people together,
helping to make the world a better place. But Facebook isn’t a utopia, and when
it comes up short, Dave Willner tries to clean up.
Dressed in Facebook’s quasi-official uniform of jeans, a T-shirt and flip-flops,
the 26-year-old Mr. Willner hardly looks like a cop on the beat. Yet he and his
colleagues on Facebook’s “hate and harassment team” are part of a virtual police
squad charged with taking down content that is illegal or violates Facebook’s
terms of service. That puts them on the front line of the debate over free
speech on the Internet.
That role came into sharp focus last week as the controversy about WikiLeaks
boiled over on the Web, with coordinated attacks on major corporate and
government sites perceived to be hostile to that group.
Facebook took down a page used by WikiLeaks supporters to organize hacking
attacks on the sites of such companies, including PayPal and MasterCard; it said
the page violated the terms of service, which prohibit material that is hateful,
threatening, pornographic or incites violence or illegal acts. But it did not
remove WikiLeaks’s own Facebook pages.
Facebook’s decision in the WikiLeaks matter illustrates the complexities that
the company grapples with, on issues as diverse as that controversy, verbal
bullying among teenagers, gay-baiting and religious intolerance.
With Facebook’s prominence on the Web — its more than 500 million members upload
more than one billion pieces of content a day — the site’s role as an arbiter of
free speech is likely to become even more pronounced.
“Facebook has more power in determining who can speak and who can be heard
around the globe than any Supreme Court justice, any king or any president,”
said Jeffrey Rosen, a law professor at George Washington University who has
written about free speech on the Internet. “It is important that Facebook is
exercising its power carefully and protecting more speech rather than less.”
But Facebook rarely pleases everyone. Any piece of content — a photograph,
video, page or even a message between two individuals — could offend somebody.
Decisions by the company not to remove material related to Holocaust denial or
pages critical of Islam and other religions, for example, have annoyed advocacy
groups and prompted some foreign governments to temporarily block the site.
Some critics say Facebook does not do enough to prevent certain abuses, like
bullying, and may put users at risk with lax privacy policies. They also say the
company is often too slow to respond to problems.
For example, a page lampooning and, in some instances, threatening violence
against an 11-year-old girl from Orlando, Fla., who had appeared in a music
video, was still up last week, months after users reported the page to Facebook.
The girl’s mother, Christa Etheridge, said she had been in touch with law
enforcement authorities and was hoping the offenders would be prosecuted.
“I’m highly upset that Facebook has allowed this to go on repeatedly and to let
it get this far,” she said.
A Facebook spokesman said the company had left the page up because it did not
violate its terms of service, which allow criticism of a public figure. The
spokesman said that by appearing in a band’s video, the girl had become a public
figure, and that the threatening comments had not been posted until a few days
ago. Those comments, and the account of the user who had posted them, were
removed after The New York Times inquired about them.
Facebook says it is constantly working to improve its tools to report abuse and
trying to educate users about bullying. And it says it responds as fast as it
can to the roughly two million reports of potentially abusive content that its
users flag every week.
“Our intent is to triage to make sure we get to the high-priority, high-risk and
high-visibility items most quickly,” said Joe Sullivan, Facebook’s chief
In early October, Mr. Willner and his colleagues spent more than a week dealing
with one high-risk, highly visible case; rogue citizens of Facebook’s world had
posted antigay messages and threats of violence on a page inviting people to
remember Tyler Clementi and other gay teenagers who have committed suicide, on
so-called Spirit Day, Oct. 20.
Working with colleagues here and in Dublin, they tracked down the accounts of
the offenders and shut them down. Then, using an automated technology to tap
Facebook’s graph of connections between members, they tracked down more profiles
for people, who, as it turned out, had also been posting violent messages.
“Most of the hateful content was coming from fake profiles,” said James
Mitchell, who is Mr. Willner’s supervisor and leads the team. He said that
because most of these profiles, created by people he called “trolls,” were
connected to those of other trolls, Facebook could track down and block an
entire network relatively quickly.
Using the system, Mr. Willner and his colleagues silenced dozens of troll
accounts, and the page became usable again. But trolls are repeat offenders, and
it took Mr. Willner and his colleagues nearly 10 days of monitoring the page
around the clock to take down over 7,000 profiles that kept surfacing to attack
the Spirit Day event page.
Most abuse incidents are not nearly as prominent or public as the defacing of
the Spirit Day page, which had nearly 1.5 million members. As with schoolyard
taunts, they often happen among a small group of people, hidden from casual
On a morning in November, Nick Sullivan, a member of the hate and harassment
team, watched as reports of bullying incidents scrolled across his screen, full
of mind-numbing meanness. “Emily looks like a brother.” (Deleted) “Grady is with
Dave.” (Deleted) “Ronald is the biggest loser.” (Deleted) Although the insults
are relatively mild, as attacks on specific people who are not public figures,
these all violated the terms of service.
“There’s definitely some crazy stuff out there,” Mr. Sullivan said. “But you can
do thousands of these in a day.”
Nancy Willard, director of the Center for Safe and Responsible Internet Use,
which advises parents and teachers on Internet safety, said her organization
frequently received complaints that Facebook does not quickly remove threats
against individuals. Jim Steyer, executive director of Common Sense Media, a
nonprofit group based in San Francisco, also said that many instances of abuse
seemed to fall through the cracks.
“Self-policing can take some time, and by then a lot of the damage may already
be done,” he said.
Facebook maintains it is doing its best.
“In the same way that efforts to combat bullying offline are not 100 percent
successful, the efforts to stop people from saying something offensive about
another person online are not complete either,” Joe Sullivan said.
Facebook faces even thornier challenges when policing activity that is
considered political by some, and illegal by others, like the controversy over
WikiLeaks and the secret diplomatic cables it published.
Last spring, for example, the company declined to take down pages related to
“Everybody Draw Muhammad Day,” an Internetwide protest to defend free speech
that surfaced in repudiation of death threats received by two cartoonists who
had drawn pictures of Muhammad. A lot of the discussion on Facebook involved
people in Islamic countries debating with people in the West about why the
Facebook’s team worked to separate the political discussion from the attacks on
specific people or Muslims. “There were people on the page that were crossing
the line, but the page itself was not crossing the line,” Mr. Mitchell said.
Facebook’s refusal to shut down the debate caused its entire site to be blocked
in Pakistan and Bangladesh for several days.
Facebook has also sought to walk a delicate line on Holocaust denial. The
company has generally refused to block Holocaust denial material, but has worked
with human rights groups to take down some content linked to organizations or
groups, like the government of Iran, for which Holocaust denial is part of a
larger campaign against Jews.
“Obviously we disagree with them on Holocaust denial,” said Rabbi Abraham
Cooper, associate dean of the Simon Wiesenthal Center. But Rabbi Cooper said
Facebook had done a better job than many other major Web sites in developing a
thoughtful policy on hate and harassment.
The soft-spoken Mr. Willner, who on his own Facebook page describes his
political views as “turning swords into plowshares and spears into pruning
hooks,” makes for an unlikely enforcer. An archaeology and anthropology major in
college, he said that while he loved his job, he did not love watching so much
of the underbelly of Facebook.
“I handle it by focusing on the fact that what we do matters,” he said.
November 5, 2010
The New York Times
By JEREMY W. PETERS
and BRIAN STELTER
AMONG the many firsts in the 2010 elections, it is safe to assume that the
following words had never before been uttered about a future member of Congress,
“This is a candidate who is probably best known for getting drunk and having sex
The comment, made by the chairman of the Wisconsin Democratic Party, was lobbed
at Sean Duffy, who overcame his bawdy past as a star on MTV’s “Real World:
Boston” in 1997 to ride a wave of conservative discontent into office. Some of
Mr. Duffy’s youthful indiscretions that were captured on film and dredged up by
his opponents included a drunken toga party and images of him dancing on a pool
table in his underwear.
With the ubiquity of technology and social networking Web sites like Facebook
that allow — and compel — young people to document themselves drinking, wearing
little clothing or putting themselves in otherwise compromised positions, it was
a given that a generation of politicians would someday find themselves
confronted with digital evidence of their more immodest and imprudent moments.
But who knew it would happen this quickly?
Politics today is rife with examples of candidates having to explain why they
were posing shirtless for pictures poolside with a skimpily clad woman
(Representative Aaron Schock of Illinois), simulating sex acts on a toy (the
Congressional candidate Krystal Ball of Virginia), or carousing on Halloween
night dressed as a ladybug (the Senate candidate Christine O’Donnell of
“I think all of us know that politicians would have to confront the Facebook
skeletons in their closet, but that it would be in 20 years, not in two years,”
said Anil Dash, a technology consultant and pioneer of the blogosphere when it
was just beginning in the late 1990s. “By the time the next generation comes
into power, they’ll just assume this is how it’s always been.”
And the list of embarrassing moments caught on film goes on. Blake Farenthold, a
Republican candidate for Congress in Texas, had to defend himself after pictures
surfaced right before the election of him wearing pajamas with little yellow
ducks as he stood grinning next to a woman in black lingerie.
A Congressional race in Ohio became awkward after Rich Iott, the Republican
candidate, was shown in a photo dressed up as a Nazi for a World War II
The candidates themselves are not the only ones being confronted with images
from the past. In 2008, photographs of President Obama’s speechwriter Jon
Favreau groping a cardboard cutout of Hillary Rodham Clinton made their way onto
blogs. This year, in the Minnesota race for governor, Facebook photos of the
Republican candidate’s under-age son drinking alcohol were disseminated, forcing
the candidate, Tom Emmer, to put out a statement on the matter. He called the
episode “a serious mistake” and said his son had paid the consequences.
With so many examples to point to already, could this mean that drunken Facebook
photos of the presidential candidates of 2024 and of the Supreme Court justice
nominees of 2040 are already out there?
As the cases of Mr. Schock (29), Ms. Ball (28) and Mr. Favreau (29) suggest,
today’s generation of future leaders has grown up in an era when letting one’s
guard down for one’s Facebook friends to see is an afterthought.
Ms. Ball, a Democrat, was stunned when she found out that six-year-old party
pictures were circulating online. In them, she was wearing a Santa cap and
provocative lacy hosiery while holding and putting her mouth around a sex toy.
The story went viral, getting attention from news media outlets as varied as
Gawker and National Public Radio.
“I think I was the No. 3 most-Googled term in the whole world over some stupid
gag I played when I was 22 years old,” Ms. Ball said in a phone interview on
Wednesday, the day after she lost her election.
While her opponent already had a comfortable advantage in the Republican-leaning
district by the time the pictures came out, Ms. Ball’s experience raises the
question of whether American culture will ever evolve to the point where voters
tolerate pictures of future leaders in various states of inebriation and
Ms. Ball, a certified public accountant, has used the experience as an
opportunity to warn of a potential chilling effect on tomorrow’s leaders.
Candidates, she argued, should not be shamed out of a race because of mistakes
made in their youth. “I had a whole lot of people who were older than me saying
they were feeling grateful that Facebook and digital cameras weren’t around when
they were growing up,” she said. “I am not the only person with stupid photos
out there, and I would hate to have some young man or young woman think, ‘I
can’t run for office because I did something stupid at a party however long
Mr. Duffy, who won his race, used the same argument in distancing himself from
his “Real World” days. “I never thought I would run for Congress,” he was quoted
by The Washington Post as saying in June. “If you look back at a certain reality
TV show, you know that.” His involvement with the show seemed to have little
impact on his campaign, despite efforts by his opponents to paint him as a
As the Facebook generation ages, time indeed may prove that they are more
willing to overlook the indiscretions of their peers out of empathy.
“We’re in kind of a cultural transformation right now,” said James Lull, a
professor emeritus of communication studies at San Jose State University, an
author and an editor of books on media and culture. “It’s a relatively slow
process in political terms. But culturally we’re going to get used to this. So
I’m not sure the ‘Oh my God!’ feelings we’re getting today will be the same on
down the line. I think there’s going to be an erosion to the impact.”
Still, it seems certain that right now, the aspiring leaders of the United
States are busy scrubbing their Facebook profiles of incriminating evidence,
looking at those who have learned the hard way. In 2008, Republican handlers
failed to clean up the MySpace page of Levi Johnston, the boyfriend of vice-
presidential nominee Sarah Palin’s daughter Bristol. On the page, Mr. Johnston
called himself a “redneck” who didn’t want children; his girlfriend was pregnant
at the time.
Still, humans can be as unforgiving as they can be indiscreet. Daniel J. Solove,
a professor at George Washington University Law School and the author of “The
Future of Reputation,” said a lot of people make the argument that “if
everyone’s warts are exposed, hey, ‘Everybody has warts, we’ll live with it.’ ”
“I think that’s overly optimistic,” he added. “That’s not human nature.”
Sergey Brin, a Google founder, takes issue with people who say
Google has failed to gain a foothold in social networking. Google has had
successes, he often says, especially with Orkut, the dominant service in Brazil
Mr. Brin may soon have to revise his answer.
Facebook, the social network service that started in a Harvard dorm room just
six years ago, is growing at a dizzying rate around the globe, surging to nearly
500 million users, from 200 million users just 15 months ago.
It is pulling even with Orkut in India, where only a year ago, Orkut was more
than twice as large as Facebook. In the last year, Facebook has grown eightfold,
to eight million users, in Brazil, where Orkut has 28 million.
In country after country, Facebook is cementing itself as the leader and often
displacing other social networks, much as it outflanked MySpace in the United
States. In Britain, for example, Facebook made the formerly popular Bebo all but
irrelevant, forcing AOL to sell the site at a huge loss two years after it
bought it for $850 million. In Germany, Facebook surpassed StudiVZ, which until
February was the dominant social network there.
With his typical self-confidence, Mark Zuckerberg, Facebook’s 26-year-old chief
executive, recently said it was “almost guaranteed” that the company would reach
a billion users.
Though he did not say when it would reach that mark, the prediction was not
greeted with the skepticism that had met his previous boasts of fast growth.
“They have been more innovative than any other social network, and they are
going to continue to grow,” said Jeremiah Owyang, an analyst with the Altimeter
Group. “Facebook wants to be ubiquitous, and they are being successful for now.”
The rapid ascent of Facebook has no company more worried than Google, which sees
the social networking giant as a threat on multiple fronts. Much of the activity
on Facebook is invisible to Google’s search engine, which makes it less useful
over time. What’s more, the billions of links posted by users on Facebook have
turned the social network into an important driver of users to sites across the
Web. That has been Google’s role.
Google has tried time and again to break into social networking not only with
Orkut, but also with user profiles, with an industrywide initiative called
OpenSocial, and, most recently, with Buzz, a social network that mixes elements
of Facebook and Twitter with Gmail. But none of those initiatives have made a
dent in Facebook.
Google is said to be trying again with a secret project for a service called
Google Me, according to several reports. Google declined to comment for this
Google makes its money from advertising, and even here, Facebook poses a
“There is nothing more threatening to Google than a company that has 500 million
subscribers and knows a lot about them and places targeted advertisements in
front of them,” said Todd Dagres, a partner at Spark Capital, a venture firm
that has invested in Twitter and other social networking companies. “For every
second that people are on Facebook and for every ad that Facebook puts in front
of their face, it is one less second they are on Google and one less ad that
Google puts in front of their face.”
With nearly two-thirds of all Internet users in the United States signed up on
Facebook, the company has focused on international expansion.
Just over two years ago, Facebook was available only in English. Still, nearly
half of its users were outside the United States, and its presence was
particularly strong in Britain, Australia and other English-speaking countries.
The task of expanding the site overseas fell on Javier Olivan, a 33-year-old
Spaniard who joined Facebook three years ago, when the site had 30 million
users. Mr. Olivan led an innovative effort by Facebook to have its users
translate the site into more than 80 languages. Other Web sites and technology
companies, notably Mozilla, the maker of Firefox, had used volunteers to
translate their sites or programs.
But with 300,000 words on Facebook’s site — not counting material posted by
users — the task was immense. Facebook not only encouraged users to translate
parts of the site, but also let other users fine-tune those translations or pick
among multiple translations. Nearly 300,000 users participated.
“Nobody had done it at the scale that we were doing it,” Mr. Olivan said.
The effort paid off. Now about 70 percent of Facebook’s users are outside the
United States. And while the number of users in the United States doubled in the
last year, to 123 million, according to comScore, the number more than tripled
in Mexico, to 11 million, and it more than quadrupled in Germany, to 19 million.
With every new translation, Facebook pushed into a new country or region, and
its spread often mirrored the ties between nations or the movement of people
across borders. After becoming popular in Italy, for example, Facebook spread to
the Italian-speaking portions of Switzerland. But in German-speaking areas of
Switzerland, adoption of Facebook lagged. When Facebook began to gain momentum
in Brazil, the activity was most intense in southern parts of the country that
border on neighboring Argentina, where Facebook was already popular.
“It’s a mapping of the real world,” Mr. Olivan said.
Facebook is not popular everywhere. The Web site is largely blocked in China.
And with fewer than a million users each in Japan, South Korea and Russia, it
lags far behind home-grown social networks in those major markets.
Mr. Olivan, who leads a team of just 12 people, hopes to change that. Facebook
recently sent some of its best engineers to a new office in Tokyo, where they
are working to fine-tune searches so they work with all three Japanese scripts.
In South Korea, as well as in Japan, where users post to their social networks
on mobile phones more than on PCs, the company is working with network operators
to ensure distribution of its service.
Industry insiders say that, most of all, Facebook is benefiting from a cycle
where success breeds more success. In particular, its growing revenue, estimated
at $1 billion annually, allows the company to invest in improving its product
and keep competitors at bay.
“I think that Facebook is winning for two reasons,” said Bing Gordon, a partner
at Kleiner Perkins Caufield & Byers and a board member of Zynga, the maker of
popular Facebook games like FarmVille and Mafia Wars. Mr. Gordon said that
Facebook had hired some of the best engineers in Silicon Valley, and he said
that the company’s strategy to create a platform for other software developers
had played a critical role.
“They have opened up a platform, and they have the best apps on that platform,”
Mr. Gordon said.
With Facebook’s social networking lead growing, it is not clear whether Google,
or any other company, will succeed in derailing its march forward.
Says Danny Sullivan, the editor of Search Engine Land, an industry blog, “Google
can’t even get to the first base of social networks, which is people interacting
with each other, much less to second or third base, which is people interacting
with each other through games and applications.”
For many users of Facebook, the world’s largest social network, it was just
the latest in a string of frustrations.
On Wednesday, users discovered a glitch that gave them access to supposedly
private information in the accounts of their Facebook friends, like chat
Not long before, Facebook had introduced changes that essentially forced users
to choose between making information about their interests available to anyone
or removing it altogether.
Although Facebook quickly moved to close the security hole on Wednesday, the
breach heightened a feeling among many users that it was becoming hard to trust
the service to protect their personal information.
“Facebook has become more scary than fun,” said Jeffrey P. Ament, 35, a
government contractor who lives in Rockville, Md.
Mr. Ament said he was so fed up with Facebook that he deleted his account this
week after three years of using the service. “Every week there seems to be a new
privacy update or change, and I just can’t keep up with it.”
Facebook said it did not think the security hole, which was open a few hours,
would have a lasting impact on the company’s reputation.
“For a service that has grown as dramatically as we have grown, that now assists
with more than 400 million people sharing billions of pieces of content with
their friends and the institutions they care about, we think our track record
for security and safety is unrivaled,” said Elliot Schrage, the company’s vice
president for public policy. “Are we perfect? Of course not.”
Facebook is increasingly finding itself at the center of a tense discussion over
privacy and how personal data is used by the Web sites that collect it, said
James E. Katz, a professor of communications at Rutgers University.
“It’s clear that we keep discovering new boundaries of privacy that are possible
to push and just as quickly breached,” Mr. Katz said.
Social networking experts and analysts wonder whether Facebook is pushing the
envelope in a way that could damage its standing over time. The privacy mishap
on Wednesday, first reported by the blog TechCrunch, did not help matters.
“While this breach appears to be relatively small, it’s inopportunely timed,”
said Augie Ray, an analyst with Forrester Research. “It threatens to undermine
what Facebook hopes to achieve with its network over the next few years, because
users have to ask whether it is a platform worthy of their trust.”
Over the last few months, Facebook has introduced changes that encourage users
to make their photos and other information accessible to anyone on the Internet.
Last month its chief executive, Mark Zuckerberg, unveiled plans to begin sharing
users’ information with some outside Web sites, and Facebook began prompting
users to link information in their profile pages, like their hobbies and
hometowns, in a way that makes that information public.
That last change prompted the Electronic Privacy Information Center, an advocacy
group, to file a complaint on Wednesday with the Federal Trade Commission.
“Facebook continues to manipulate the privacy settings of users and its own
limited purpose and make it widely available for commercial purposes,” Marc
Rotenberg, the group’s executive director, said in a letter to the commission.
The extent of the discontent among users is hard to quantify, but one measure is
a group created on Facebook to protest the recent changes, which has attracted
more than 2.2 million members.
Mr. Schrage said that the company was aware that some users were not happy with
the changes, but that the overall response had been positive.
Part of the reason Facebook’s recent changes are upsetting users is that, in
contrast to a service like Twitter, most people signed up for Facebook with the
understanding that their information would be available only to an approved
circle of friends, said Danah Boyd, a social media researcher at Microsoft and a
fellow at Harvard University’s Berkman Center for Internet and Society.
“Facebook started out with a strong promise of privacy,” she said. “You had to
be at a university or some network to sign up. That’s part of how it competed
with other social networks, by being the anti-MySpace.”
As the company has changed its approach to privacy, it has introduced new ways
for users to adjust their privacy settings. But these tools have grown
increasingly convoluted, leaving many users frustrated and unsure of what
information is available to whom. They say a site that they joined for the sake
of friends and fun has started to feel too much like work.
“At this point, I have no idea how many times I’ve changed my settings,” said
Lauren Snead, a 24-year-old student in Murfreesboro, Tenn. “I’ve done it so many
times. I’m tired of logging in one day and seeing everything is different and
trying to understand what it means.”
In addition, many users are not even aware of the privacy settings, Ms. Boyd
said. A recent survey from Consumer Reports found that 23 percent of Facebook
users either did not know the site offered privacy controls or chose not to use
Mr. Schrage said the company was working to clear up confusion about the
Many frustrated users may not give up on the site because it has become a vital
form of communication. Facebook continues to add users at a rapid clip, doubling
in size in the last year.
“I’m not going to quit Facebook, because it’s so ingrained in the culture,” said
Ryan Scannell, a 26-year-old food scientist in Chicago. “Facebook is not a
private place, I don’t expect it to be. But at the same time, I’d like to
control what’s accessible to strangers and what’s accessible to family and
There are financial motives behind the company’s moves. One of the ways Facebook
makes money with its free service is by customizing the selection of
advertisements shown to individual users. The more information publicly
available about users, the more the company can make from such focused ads.
In addition, analysts say Facebook may be eyeing the lucrative market for online
search, figuring that its users will be more likely to turn to their friends for
advice and information than the wider Web. That opens up more opportunities for
“They’re heating up in their battle against Google,” said Sean Sullivan, a
security adviser at the Internet security firm F-Secure who analyzes social
networks. “If I’m looking for a day care for my 6-year-old, I’m going to put
that in my status message, not do a Google search.”
Mr. Schrage of Facebook said the controversy over the site’s changes was
indicative of a larger shift online.
“Facebook has been made the center of attention around a really important issue
of how technology is changing the conception of privacy, control and sharing,”
he said. “People are uneasy about it, but as they start to see the benefits and
advantages of it, they start to see the value of the experiences.”
The social networking site
has topped Google in the number of hits
Sunday 21 March 2010
This article was published on guardian.co.uk
at 20.00 GMT
on Sunday 21 March
A version appeared on p2 of the G2 section
of the Guardian
on Monday 22 March
If you are a young adult or teenager, you can't live without Facebook. It's
the first site I go to when I turn on my computer. I have even checked it on my
mobile on planes and in toilets. Which should go some way toward explaining why
Facebook topped Google as America's most visited site a fortnight ago.
Forget dates in the diary – Facebook is a one-stop events calendar. A friend
once sent out beautiful hand-made invitations to her birthday party. "It's so
quaint!" she cooed. Four days later the invites had been lost and no one could
remember if the party was happening a week on Saturday or a month on Sunday.
Facebook has changed the way we approach relationships. You don't meet somebody
at a party and hope you run into them again five months later. You add them to
your "friends" list on the social networking site. A couple of years ago, I
might have known about 30 people at university and had five close friends. Now I
can keep in touch with hundreds.
The downside is that you have infinite access to the private lives of your
friends. It's weird when you begin a story, only to have someone say, "I know, I
saw the Facebook pictures." And it can lead to less-than-pleasant revelations
about people you thought you knew. A close friend once offered to house-sit when
my mother was out of town. Two weeks later, a photo album called "London
FUNTIMES" appeared on the friend's profile. House-sitting now apparently
includes inviting 10 people round to smoke a huge shisha pipe. Which explained
the charred crater in the middle of my mum's cream carpet.
Even worse is the Facebook photobomb – when you turn up in the background of
somebody else's photo doing something you shouldn't. A few years ago, you might
have been an amusing but anonymous backdrop in a picture hidden in a photo
album. Now, your friends immediately tag you as the girl pictured throwing up in
the pint glass.
But it's not all bad news. You can at least vet new acquaintances to avoid those
who join Facebook groups with "hilarious" titles such as "WTF is Alice doing in
Wonderland? How did she get out of the kitchen?".
So if you're surprised that Facebook could get even more hits than Google, you
clearly haven't been using it right. Either that, or you're still on Friends
Facebook, the popular social networking site where people share photos and
personal updates with friends and acquaintances, lost some face on Wednesday.
After three days of pressure from angry users and the threat of a formal legal
complaint by a coalition of consumer advocacy groups, the company reversed
changes to its contract with users that had appeared to give it perpetual
ownership of their contributions to the service.
Facebook disavowed any such intentions but said early Wednesday that it was
temporarily rescinding the changes and restoring an earlier version of its
In a message to members, the company, based in Palo Alto, Calif., said it would
collaborate with users to create a more easily understandable document.
Facebook’s chief executive, Mark Zuckerberg, also invited users to contribute to
a new Bill of Rights and Responsibilities, which would serve as a governing
document for the site. Facebook has been redefining notions of privacy while
growing so rapidly that it now has 175 million active users, giving it a
population larger than most countries.
In an interview, Chris Kelly, Facebook’s chief privacy officer, characterized
the event as a misunderstanding, stemming from a clumsy attempt by the company
to simplify its contract with users, called the terms of service.
“We were not trying to make a substantive change in our rights or ability to
control our members’ content on the service at all,” Mr. Kelly said. “As that
misunderstanding became the main theme, we became very concerned and wanted to
communicate very clearly to everyone our intentions by rolling back to the old
terms of service.”
Facebook’s retreat ends a hullabaloo in which tens of thousands of Facebook
members joined groups devoted to protesting the changes and bloggers heaped
scorn and criticism on the company. Facebook sought to limit the damage from an
uproar that in many ways was reminiscent of the flap in 2007 over its Beacon
That project shared details of members’ activities on certain outside sites to
all of their Facebook friends. The Electronic Privacy Information Center, along
with 25 other consumer interest groups, had planned to file a complaint with the
Federal Trade Commission on Wednesday. The complaint was going to claim that
Facebook’s new rules were unfair and deceptive trade practices, because the
company had repeatedly promised users that they owned their content but appeared
to be saying something else in its revised terms.
The center, based in Washington, was prepared to argue that Facebook’s new rules
were meant to accompany changes to the site that would give developers and
advertisers the ability to access users’ contributions, like status updates,
which many members use to reveal details about their lives, for example, where
they are traveling.
“This was a digital rights grab,” said Marc Rotenberg, the center’s executive
director. “Facebook was transferring control of user-generated content from the
user to Facebook, and that was really alarming.”
He said Facebook representatives contacted him on Tuesday night to ask whether
his group would refrain from filing the complaint if the company backtracked to
the old language in the contract. Mr. Rotenberg agreed.
Facebook’s retreat can also be credited to the mass of members who made their
voices heard in a strikingly vociferous movement that spanned the globe.
Facebook made the changes to its terms of service on Feb. 6, but they were
highlighted Sunday by a blog called The Consumerist, which reviewed the
contract. The blog, which is owned by Consumers Union, publisher of Consumer
Reports, warned people to “never upload anything you don’t feel comfortable
giving away forever, because it’s Facebook’s now.”
Mr. Kelly of Facebook says that the blog made “substantial misinterpretations,”
including missing a crucial provision that made Facebook’s license to members’
material subject to the user’s individual privacy settings. He conceded,
however, that Facebook did not effectively communicate that nuance.
The Consumerist blog entry set off an explosion of activity that overwhelmed
Facebook’s own attempts to quickly clarify the matter. In a blog post on Monday,
Mr. Zuckerberg tried to reassure users that they still owned and controlled
their own data and that the company had no plans to use it without their
That did not satisfy Facebook users like Julius Harper, 25. On Monday, he
created a Facebook group to protest the changes. Soon after, he joined with Anne
Kathrine Petteroe, 32, a technology consultant in Oslo, who had started a
By Wednesday, more than 100,000 people had joined their efforts and were airing
their concerns, like whether photos they post to the site could appear in ads
without their permission.
“I believe Facebook on this matter, but my issue is that Facebook is not just
one person,” Mr. Harper said. “They could get bought out by anybody, and those
people may not share the good intentions that Mark and his team claim to have.”
Analysts say that much of the confusion and rancor this week stemmed from the
fact that sites like Facebook have created a new sphere of shared information
for which there are no established privacy rules.
E-mail between two people is private, for example, and a post on a message board
is clearly public. But much communication among Facebook members, which is
exposed only to their friends, sometimes on a so-called wall, lies in a middle
ground one might call “semipublic.”
“If I post something on your wall, and then I decide to close my account, what
happens to that wall post?” said Marcia Hofmann, a lawyer with the Electronic
Frontier Foundation, an Internet civil liberties group. “Is that my data or your
data? That’s a very tricky issue, and it’s one that hasn’t come up a whole lot
in the past.”
FRANCISCO — Facebook, the rapidly growing social network, unveiled some new
features on Wednesday as it works to broaden its reach online and to recalibrate
its sometimes contentious relationship with the thousands of developers writing
programs for the service.
In a speech at his company’s annual conference for developers, called F8, Mark
Zuckerberg, Facebook’s 24-year-old chief executive, also demonstrated the
company’s new design. He predicted that there would soon be a wave of social Web
sites built on top of the information users give to social networks.
“We are going to see the big social networks start to decentralize into a series
of social applications across the Web,” Mr. Zuckerberg said. “I think we are at
the beginning of a movement and the beginning of an industry.”
To carve out a piece of that future, the company announced Facebook Connect, a
way that other Web sites can integrate parts of Facebook’s service. Web sites
can ask users for their Facebook user name and password, instead of creating an
identity verification system themselves, and offer their users the ability to
import their list of friends from Facebook.
For example, the mobile service company Loopt, based in Mountain View, Calif.,
helps people find their friends and see what they are doing on a map on their
mobile phone. It will use Facebook Connect so its users do not have to re-enter
their connections to the friends they want to track.
“Recreating the social graph and helping people identify who their friends are
is never something we wanted to do,” said Evan Tana, director of product
management at Loopt. “This makes our lives a lot easier.”
Sites including Google and MySpace have introduced similar systems for
confirming users’ identities.
Facebook Connect is a two-way highway — information about a user’s activity on
those other Web sites also travels back and appears on the “news feed” on
Facebook, where it is seen by that person’s friends on the service. But Mr.
Zuckerberg said users could strictly control what they share, jokingly referring
to last year’s controversial Beacon advertising program, which was viewed as
being overly invasive.
“We paid a lot of attention to making sure that people have complete control
over what is in their feed,” he said. “We learned from last time.”
Mr. Zuckerberg also reflected on the 15 months since Facebook opened up its site
to outside companies and invited them to build profitable features for it.
The move was generally seen as smart and somewhat momentous inside the tech
world. Facebook says 400,000 developers have worked on tools for the site, and
other companies, including Google and Microsoft, have sought to create their own
competing open systems.
But Facebook’s platform has also generated its share of controversy. Many
trivial applications have clogged the site, and sought to spread themselves
among users using a variety of tricks. Frustrated, Facebook has tried to counter
that and put more emphasis on significant and trustworthy applications.
“As happy as I am with the growth of the ecosystem, there are a lot of mistakes
we made,” Mr. Zuckerberg said. “I think we can all agree that we don’t want an
ecosystem full of applications that are just trying to spread themselves.”
To that end, Facebook announced a series of new incentives for developers to
write what it characterized as “meaningful” tools for the service. It said it
would pick certain applications that meet a set of Facebook principles to be
part of a new “Great Apps” program.
Those applications will get higher visibility on the service and will be able to
work more closely with Facebook. Causes, a charitable giving tool, and iLike, a
music sharing service, were the first two applications to receive this
Sean Parker, a former Facebook executive who now runs Causes, said Facebook was
trying to stimulate the creation of more sophisticated applications. “They are
trying to evolve to a place where the right companies get funded and they launch
more ambitious features on the platform,” he said.
Facebook said it was also setting up another level of certification, called the
Facebook Verification program, for applications that meet the basic criteria of
being secure and trustworthy. These applications will get added visibility and a
Facebook also unveiled a new developer’s site and pledged to communicate more
openly with the entrepreneurs who have tethered their future to Facebook.
The last few months have been marked by plenty of controversy in Facebook’s
world, with developers complaining that Facebook was not communicating well
about changes to the service. Some accused Facebook of copying the most
successful features of outside applications and introducing competing versions.
One part of its redesign, for example, duplicates some of the features of Top
Friends, a popular program created by San Francisco-based Slide, a leading
Keith Rabois, a vice president at Slide, said this was one reason that interest
among venture capitalists in backing application makers had cooled. “I think
every venture capitalist is looking at Facebook very differently than it did a
year ago,” he said. “No one wants to build something that just becomes an R.& D.
company for Facebook.”
Not everyone was negative. Blake Commagere, the developer who created zombie and
vampire games for a variety of social networks, said Facebook was simply
learning as it goes, like everyone else in an unprecedented Web experiment.
“It’s been a learning process for developers and for Facebook,” he said. “They
are breaking new ground, but these guys are sharp. They are going to continue to
FRANCISCO, July 29 — Facebook, the online social network, has stolen some of
MySpace’s momentum with users and the news media. Now, it is being subjected to
the same accusations that it does not do enough to keep sexual predators off its
Richard Blumenthal, Connecticut’s attorney general, said that investigators in
his state were looking into “three or more” cases of convicted sex offenders who
had registered on Facebook and had “also found inappropriate images and content”
on the service. The inquiry continues, he said, and state officials have
contacted Facebook and asked it to remove the profiles.
“There is no question that Facebook is encountering some of the same problems
that MySpace has posed,” Mr. Blumenthal said. “They should be held accountable,
and we intend to do so.”
MySpace has been implicated in dozens of cases around the country in which
predators used the service to contact and arrange improper meetings with minors.
Some of these encounters have led to criminal charges against the offenders, and
civil suits against MySpace.
Chris Kelly, Facebook’s chief privacy officer, said he was not familiar with the
Connecticut investigation but that the company has received “a number” of such
reports and usually takes down such profiles within 72 hours.
“We want to be a good partner to the states in attempting to address this
societal problem,” Mr. Kelly said. “We’ve worked with them for quite some time
now, and we look forward to continuing our fruitful partnership.”
Facebook, founded in 2004 and based in Palo Alto, Calif., has positioned itself
as the safe social-networking alternative. It has generally gone to greater
lengths than rivals to keep adults and under-age users apart, at first allowing
only college and high school students to join the service, and then largely
restricting online communication to users at the same school.
Last year, the site opened to the general public, but it still maintains various
restrictions. For example, a user’s full profile is not accessible to the
general online public, and the full profile of an under-18 Facebook member is
not viewable by a user who is over 18, unless the two are confirmed friends on
the service. But in some cases, Facebook’s younger users are vulnerable to
sexual solicitations from older users, as was demonstrated last week to The New
York Times by an anonymous person who described himself or herself in an e-mail
message as “a concerned parent.” The evidence of this person’s activities on
Facebook may give state investigators further cause for concern.
In early July, this person opened a fake account on the site, posing as a
15-year-old girl named Jerri Gelson from North Carolina. The photograph on the
fake profile page is of an under-age girl whose hair conceals her face. On the
profile page, Ms. Gelson — whom the “concerned parent” said was not a real
person — is described as looking for “random play” and “whatever I can get.”
This person then signed up for three dozen sexually themed groups — forums of
users organized around a particular topic. In the directory of groups on
Facebook, under the “sexuality” category, there are now dozens of groups with
sexually explicit topics, even though Facebook prohibits “obscene, pornographic
or sexually explicit” material in its Content Code of Conduct policy.
The groups that were signed up for include “addicted to masturbation ... and you
know if you are!”, “Facebook Swingers” and “I’m Curious About Incest.”
When the Jerri Gelson profile was linked to these groups, her name and profile
photo became visible to the group’s other users, and adult men began sexually
propositioning her with e-mail messages over Facebook. “I saw your profile pic
and thought I should get in touch with this hot girl!” wrote one bald, goateed
man from Toronto. “Like what u see?” wrote another man from Mississippi, whose
profile picture featured him sitting naked on his couch.
Several other men and women who sent e-mail messages to the Jerri Gelson account
also had nude pictures of themselves on their profiles.
Mr. Kelly of Facebook said the company strictly prohibits depictions of nudity
on the site and groups that encourage pornography and online sexual activity.
“Those people aren’t welcome on our service, and they never have been,” he said.
He also said that such images are quickly removed from Facebook, since customer
service representatives monitor the site and other users are encouraged to flag
inappropriate content. However, some of the explicit images sent to the Jerri
Gelson account were three weeks old and are still on the site.
The person who created the Jerri Gelson page had actively joined the sex-themed
groups and added some of the adults who e-mailed her to her list of confirmed
friends. Mr. Kelly said, “We want to, by default, protect people, but if there’s
a situation where younger users are reaching out, there’s only so much we can
MySpace, a division of News Corporation, has reacted to concerns about sexual
predators on its site by hiring Sentinel Tech Holding a Miami company that
maintains a database of the sex-offender registries from all 50 states. State
attorneys general recently announced that MySpace had deleted 29,000 profiles
set up by convicted sex-offenders through such screening.
Mr. Kelly said that Facebook, which is a privately held company, was proposing a
different way to identify convicted sex offenders on the service. Instead of
working through Sentinel, the company has proposed building a database of names
and e-mail addresses for convicted sexual offenders that could be compared to
the membership rolls of Internet sites. For that approach to work, however,
Facebook would have to wait until all 50 states had passed legislation requiring
sex-offenders to register their e-mail addresses. Currently such legislation is
signed or pending in 13 states.
Asked about that approach, Mr. Blumenthal, the Connecticut attorney general,
said, “I think there are more efficient and effective ways to do the screening.”
Mr. Blumenthal said he was taking a particular interest in Facebook because his
children use the service. He said of its recent opening to a more general
audience, “I have observed its mutation into a somewhat different kind of site.
There are now some troubling aspects to its features and culture that were