Facebook's Evolution

The social networking site celebrates 500 million users amid privacy concerns

July 21, 2010— -- Social networking Web site Facebook announced that it had reached 500 million users, making this small six-year-old start-up one of the fastest growing companies in recent years.

"This is an important milestone for all of you who have helped spread Facebook around the world," Facebook founder Mark Zuckerberg wrote on the company blog. "Now a lot more people have the opportunity to stay connected with the people they care about."

Facebook Goes From Dorm Room To Silicon Valley

Six years ago, Facebook founder Zuckerberg was a Harvard student and the site was being used by his fellow students to get to know one another. Since then, it's mushroomed from a favorite of college students to a favorite of grandparents too. In the past 15 months alone, Facebook has added around eight new users every second.

It is, in the simplest terms, an engine of human connection. Give Facebook a few vital facts about yourself and it gives you a direct line to your past, present and future, changing lives.

"My daughter found her on Facebook for me and the rest is history, we're married," Don Granade said of his wife, Marvella.

Facebook is where old flames are kindled and medical advice is swapped. One woman found a kidney donor on the site.

"Facebook saved my life," said Kat Robb, who posted about a soreness she was feeling after abdominal surgery. She thought it was normal, but a facebook friend told her she needed to see a doctor. The soreness was caused by clots in her lungs.

Facebook Crosses Generational Divide

Pioneer blogger Justin Hall, who launched his site "Links" in 1994, reflected on Facebook's journey.

"It says that 'Holy smokes, maybe we have a common platform for humans to communicate in the 21st century,'" Hall said. He said it was exciting to think that millions of people of all generations flock to this single site every day.

Each of Facebook's users have an average of 130 "friends" and will share 70 different bits of information about their life with them each month, including pictures, passions, causes, home movies. That makes Facebook a virtual sea of information that rivals Google in scope. But the growing pains have been sharp.

"It's a challenge to serve 500 million people and also make a business of it," Hall said.

Facebook's Mounting Privacy Concerns

Facebook founder Zuckerberg has strugged to balance the privacy concerns of his users with the need to turn all of their information into money.

"When you start a company like Facebook, you say we're gonna give all these amazing tools away for free...and a few years from now we'll figure out what the business is," said Paul Saffo, an tech industry veteran and visiting scholar at Stanford University's Media X program. "Well, they roll out these steps towards being a real, profitable business and the users say oh my gosh, this is free, but with strings attached."

Justin Hall believes Facebook's changing demographic has compounded the company's problems.

"The privacy concerns become more of a concern for people who have more to lose, people who are a little older, have careers and families, so I think it'll be a careful balancing act for Facebook to both keep the young people active and engage a whole new group of folks who might have other concerns," Hall said.

Zuckerberg has promised to protect his users, but customer satisfaction seems is surprisingly low.

When Facebook users were surveyed by the University of Michigan's 2010 American Customer Service Satisfaction Index recently, they rated the company in the bottom five percent. Those are the kind of sour numbers normally reserved for airlines and the IRS.

Users' concerns over privacy may explain the low ratings, but Paul Saffo believes another part of the problem is the size of the network. He points to "Dunbar's number," an Oxford professor's findings that humans, even the most social ones, can only keep track of about 150 friends.

Saffo said no one can tell where Facebook will be in ten years because the technology industry is based on change.

"So you get on Facebook and you hope that you have enough friends who are interested enough in you to have a conversation, but there's this whole other group who's really interested in you," Saffo said. "Those are businesses that want to sell you something, they want to know what's on your mind."

Saffo said there's no way to tell where Facebook will be in 10 years because the technology industry is based on change.

"Mark Zuckerberg is like every other CEO in his 20s who created a world changing company," Saffo said. "He is hanging on for dear life as his company shoots off into the stratosphere so there's no way Mark can understand all the implications of what he has created."

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