Facebook Innovations & Transformations

A Critical Analysis on the Rise of Facebook

Image: FirmBee, CC0 Creative Commons

Introduction

Facebook, the largest social networking site online today may play a larger role in your life than you might initially think. Facebook has had a significant effect on the ways in which we socialise and collaborate online, as well as the digital mediation of culture. Extending beyond this, Facebook has major implications for the way we assemble ourselves legally and politically. This article aims to outline a critical analysis of Facebook across an ever present digital landscape and the ways in which this platform affects our present and future lives.

History

Launching in 2004, Facebook was co-founded and initially funded by software developer Mark Zuckerberg and angel investor Eduardo Saverin who were students and roommates at Harvard University in Cambridge, Massachusetts. Facebook was initially developed as a student communication platform with membership being limited to Harvard students, which was gradually expanded over time to the majority of universities across North America and others worldwide. It was not until 2006 that Facebook was opened to everyone over the age of 13, allowing for the progression to the global phenomenon we know it as today. From this point Facebook solidified its position as a dominant force in the social media market with exponential userbase growth year over year. Facebooks userbase grew beyond domination over its competition, and into something the world had never before seen.

Image: Note: users counted in millions, Tatiraju.rishabh, Creative Commons Attribution-Share Alike 3.0 Unported license

Timeline

This rapid growth and the production of Facebooks transformative effects can be accounted for at least in part by continual platform improvements and feature releases. Some of the foundational changes and milestones achieved by Facebook include:

  • 2006 – Launch of the news feed, an algorithmically generated stream of friends activities.
  • 2007 – Mobile support, launch of the developer application platform, Facebook Pages for brands.
  • 2008 – Facebook international headquaters set up in Dublin, Ireland.
  • 2009 – Activation of the like button and @ tagging of friends.
  • 2010 – The ability to like comments not just posts.
  • 2011 – Facebook messenger app for Android and iOS releases, interface overhaul to timeline design.
  • 2012 – Facebook goes public (IPO), monthly userbase reaches 1 billion, advertisements (featured posts) placed in users news feeds, acquires Instagram for $1 billion.
  • 2013 – Hashtags (#) for post categorisation, the ability to edit posts and comments after publishing.
  • 2014 – Facebook acquires WhatsApp for $16 billion.
  • 2015 – Reaches 1 billion daily active users.
  • 2016 – Launch of Facebook marketplace for buying and selling goods online.
  • 2017 – Facebook reaches 2 billion monthly active users, introduction of trust indicators to combat fake news.
  • 2018 – Cambridge Analytica scandal (Cadwalladr & Graham-Harrison, 2018), US congressional and UK parliamentary hearings.

Ownership

Facebook filed for an initial public offering (IPO) in 2014 with a valuation of $104 billion. Since the launch and IPO of Facebook, Zuckerberg has maintained control as chief executive officer (CEO) of the company, as well as majority shares with 24% ownership, solidifying his position in directing the future of Facebook. Further stakeholders include investments from co-founders, technology companies and venture capitalists such as Digital Sky Technologies (10%), Accel Partners (8%), Dustin Markowitz (6%), Eduardo Saverin (5%),  and Sean Parker (4%).

Image: Business Insider, CC0 Creative Commons

Acquisitions

In an effort to maintain its position at the top of the social media industry, Facebook has purchased a large portfolio of competing and related technology companies. The most notable platform acquisitions include Facebook’s purchase of the mobile messaging platform WhatsApp for $19 billion in 2014, virtual reality hardware company Oculus for $2 billion in 2014, and competing photo sharing platform Instagram for $1 billion in 2012. Each of these platforms which make up the three most expensive acquisitions in the history of Facebook continue operating as independent sites to this day. With the exception of these platforms, the majority of Facebooks acquisitions have been for the strategic procurement of talent, purchasing companies in order to selectively or completely hire software developers from them, as well as to inherit existing technologies which can be added to the Facebook code base. Examples of this include the purchase of video advertiser LiveRail for $500 million in 2014, the media advertisement analytics company Atlast for $100 million in 2013, and the facial recognition software company Face.com for $100 million in 2012 (McCutchen, 2017).

Business Model

One trend noticeable in Facebook acquisitions has been a focus on advertising, particularly as it relates to user tracking and delivering personalised advertisements based on predicted user preferences. Social networks, particularly those dominant in the mobile computing space have demonstrated great difficulty with platform monetisation due to large overhead development and hosting costs. Facebook’s move into personalised advertising is not entirely new as it is similar to the way web search providers such as Google deliver advertisements, though by tapping into a broader potential for acquiring users personal information and social connections in addition to broader web tracking, Facebook has shown great success for both small businesses targeting a local audience and major corporations in search of a wide marketing distribution network (Acar et al., 2015).

Image: rawpixel, Pexels License – Free for personal and commercial use

Suppliers

One important distinguishing feature between social networking sites and traditional media is the source of content. On Facebook all content is user driven and created, reducing overhead production costs, allowing the site to focus entirely on distribution mechanisms and platform functionality. With that said it does make Facebook highly dependent on continual engagement by its users and highly sensitive to a rapid decline of content should the userbase begin to move elsewhere.

Partners

Facebook routinely partners with digital marketing agencies. This forms the foundation of Facebooks business model as discussed above, providing an attractive platform for the sale of online advertisements, with a particular interest in user preference targeting. Facebook also partners with datacentre infrastructure companies and internet service providers to ensure the site is accessible to a global audience.

Image: PDPics, CC0 Creative Commons

Competitors

The technology and social media space can move quickly, allowing for the rapid rise and fall of competitors. Facebook’s current primary competitors include:

All of the competitors here follow a current trend in social network development which is the focus on a specific targeted niche userbase or use case. Some platforms target a specific media type, such as short text messaging on Twitter or photos on Instagram, while others narrow down further into aspects such as ephemeral messaging on Snapchat or professional networking on LinkedIn. Importantly however, no platform with Facebooks broad design and appeal can compete on userbase or revenue with Facebook. The case of Instagram is particularly interesting considering it was acquired by Facebook in 2012, though instead of being folded into Facebook it remains operational as an independent platform, allowing the company to grow and monetize a diverse portfolio of social networks which may appeal to a range of different audiences.

Regulators

Facebook is regulated by a diverse range of institutions and standards, not least of which is their own documented community standards designed to maintain a safe and equitable space for people to communicate and collaborate. Facebook’s community standards and its huge team of 7,500 content moderators likely acts as a way of self-regulating in an attempt to minimise the need for external pressures.

Facebook is also bound by the governance of legal bodies from each of the countries they operate within, particularly those with strict guidelines surrounding anti-competitive business practices and the protection of citizens digital rights, including:

Image: Facebook Ecology Diagram (created using draw.io), CC0 Creative Commons

Users

Facebook is accessed by over 2 billion users every month. Of these the majority of use is individuals utilising the platform for social engagements, news, and entertainment. Since the release of Facebook Pages in 2007, the site has also become a dominant space for business presence and brand communication. Furthermore with the introduction of being able to subscribe to an individual’s profile on a one-sided basis without the need for a mutual friendship (now called follow) in 2011, Facebook also became a space for digital media influencers and online personalities to build an audience.

Social & Cultural Innovations

The rise of Facebook as a dominant platform controlling the distribution of and access to a seemingly infinite stream of public and private discourse brings with it some challenges for engaging with digital media on a social and cultural level. Of significant concern is how much potential Facebook as a company and as a codebase has over controlling what we see and what is hidden from us in the noise of information overload. Particular attention has been paid to the effects of algorithms and metrics, where unlike search which provides access to requested information, algorithms attempt to predict what information should be surfaced and presented to the user without any input necessary. Because of this, Facebooks news feed algorithms which determine an individuals priorities of social connections and news preferences become cultural objects in and of themselves, bridging the divide between digital media and the offline experience (Gillespie, 2016).

Facebook is not however just a one-way lens into a digital media landscape. Users engage with social networks with specific goals in mind from the platform, whether it be consciously or unconsciously. The procurement of social connections and the subsequent quantification of social engagements through likes and comments becomes the foundation for a form of social capital, seemingly with an intent to improve social relationships and life satisfaction (Ellison et al., 2007). The psychological implications of dependence on digitally mediated sociality are not all positive however, with many aspects of the platform encouraging addictive behaviours and thought to be responsible for increasing rates of narcissistic attitudes and low self-esteem, particularly among youth demographics (Malik & Khan, 2015).

Image: Mediamodifier, CC0 Creative Commons

Political and Legal Transformations

The effects of Facebook extend beyond social and cultural ramifications and into the political and legal space. Facebook is often discussed as a revolutionary platform for collective activism and the successful mobilisation of political action by social connection and pressure, particularly from the perspective of engaged users (Bond et al., 2012). More critical analysis however demonstrates that the collectivity venerated on Facebook and other platforms may in fact be significantly overstated and not representative of the artificial and largely unproductive elements of digital social networking (Couldry, 2015).

In addition to this, the governance of Facebook as a private company has been called into question, with significant concern present around the authoritarian style of control the platform maintains over speech and public discourse which has been increasingly shifting to the online space (Mackinnon, 2012). The wide presence of political discourse on Facebook also provides a lens through which to view the potentials the platform offers towards the future of the legal system in a digitally mediated context. Facebook is not just a platform for distributing information about a legal issue, but can increasingly both become the source of evidence of specific communications and help facilitate easy access to legal advice (Robertson, 2012).

Conclusion

To summarise, since its launch in 2004 Facebook has changed drastically, from a small university messaging platform, to the largest social media giant of the digital era. Following these changes, we can see that Facebook has played a significant role in shaping our current social, cultural, political, and even legal contexts. Much controversy surrounds the companies business practices and technology, with a diverse range of potential long-term ramifications possible dependent on our management and moderation, both on an individual engagement and society regulatory level. As such, continual attention should be paid to Facebook and the directions they move as the digital media landscape continues to evolve at a rapid pace in front of our eyes.

Image: geralt, CC0 Creative Commons

References

Acar, G., Van Alsenoy, B., Piessens, F., Diaz, C., & Preneel, B. (2015). Facebook tracking through social plug-ins. Belgian Privacy Commission, Ver, 1, 2.

Bond, R. M., Fariss, C. J., Jones, J. J., Kramer, A. D., Marlow, C., Settle, J. E., & Fowler, J. H. (2012). A 61-million-person experiment in social influence and political mobilization. Nature, 489(7415), 295.

Cadwalladr, C., & Graham-Harrison, E. (2018). Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach. Retrieved from https://www.theguardian.com/news/2018/mar/17/cambridge-analytica-facebook-influence-us-election

Couldry, N. (2015). The myth of ‘us’: digital networks, political change and the production of collectivity. Information, Communication & Society, 18(6), 608-626.

Ellison, N. B., Steinfield, C., & Lampe, C. (2007). The benefits of Facebook “friends:” Social capital and college students’ use of online social network sites. Journal of Computer‐Mediated Communication, 12(4), 1143-1168.

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Timothy
About Timothy 5 Articles
Full time student studying a Bachelor of Liberal Arts and Science majoring in Biology and Digital Cultures at the University of Sydney.

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