2006

The astonishing success of Facebook's photos application led to a bout
of soul-searching at the company. What was it, Zuckerberg and his colleagues
asked themselves, that made photos so successful? Well, one
thing was that you could so easily find new photos your friends uploaded.
Each person's profile included a "dashboard page" that showed
which photo albums had most recently been updated. It seemed that
users wanted to know what was new. Another recent innovation had
been to order the list of friends on each user's home page according
to which profiles had been changed the most recently. They called
that "timesorting," and it won raves from users. Each time someone
changed their profile picture, it quickly led to an average of twenty-five
new page views.
What people did on Facebook was look at other people's information.
They were eager to learn what was new, what had changed, what
had happened that they didn't already know. Studying your friends' profiles
was an obsessive activity, but not a very efficient one. Click through
and try to figure out whether anything had changed since the last time
you visited. Was he still single? Did this photo mean she'd been to the
Caribbean? How come he went to that party and didn't tell me? Click
click click. The information was good—you wanted to know it—but it
was tedious to find.
So the company's young leaders came up with the idea to build a
page that showed not just the latest photos your friends had added, but
all the things that had recently changed on the profiles of your friends.
"We started asking, 'How do we get people the information they most
care about?'" says Moskovitz. "We wanted to build a screen that showed
everything. So we came up with the idea for the News Feed."
The new tool they arrived at would help users find the information
that most mattered to them at any given moment. That might include
everything from which party a friend planned to go to on Friday
to updates about the political situation in Tajikistan someone might
have posted as a Web link. The point was to make sure you saw what
you cared about, whatever it might be. The order in which information
would be presented would depend on what you had shown—by your
behavior—you liked to look at. Zuckerberg explained it to colleagues:
"A squirrel dying in front of your house may be more relevant to your
interests right now than people dying in Africa."
All this brainstorming took place in the early fall of 2005. Shortly afterward,
Adam D'Angelo talked to a new hire, Chris Cox, about building
the News Feed. "I saw a glimmer in his eyes," says Cox. "I could tell
that for him it wasn't about wanting to make money. He said, 'Look,
this is such a broken problem —I can't find out what's going on with
my friends!7 The Internet could help you answer a million questions,
but not the most important one, the one you wake up with every day—
'How are the people doing that I care about?'"
They set to work on the News Feed. "For the next eight months, it
was our labor of love," says Cox, a tall, laconic, and brainy Stanford grad
who had studied computer science, psychology, and linguistics. The
idea was audaciously ambitious: to write a set of software algorithms
to dissect the information being produced by Facebook's users, select
the actions and profile changes that would be most interesting to their
friends, and then present them to those friends in reverse chronological
order. Each person's home page would thus be completely different,
depending on who their friends were. "It was the biggest technology
challenge the company had ever faced," says Sean Parker.
The average user of Facebook at that time had about 100 friends.
The software would have to watch every action generated by every one
of those people. Then, each time you went onto the service, it would
rank the activity of all your friends based on the likelihood that you
would see it as interesting. That calculation would be based on, among
other things, your previous behavior. Perhaps you noted that you were
feeling glum or that you were going to the movies, or you uploaded a
the facebbok effect
photo, indicated you like the new Wilco album, or posted a link to a
segment of the Daily Show. Facebook's software would detect this new
information and decide whether to send it to your friends, based on
what it calculated is likely to interest them. It would infer this based on
its observations of your friends' previous behavior. If they liked hip-hop
they might not get the Wilco info. If they never watched videos they
might not see the Daily S/zow link. It would apply such logic to every
sort of information and activity on the site. It would repeat this process
every fifteen minutes or so. Now multiply all this by 6 million —the
number of active users Facebook had at the project's outset. This was a
massive engineering and product design challenge.
The News Feed would be a radical change. "It's not a new feature,
it's a major product evolution," said Zuckerberg at the time. It would
remake Facebook. It was necessary as a foundation for future innovations
he was already thinking about. He evangelized it with conviction
to the company's engineers and product designers, not always successfully.
"Many of us were 'No no no, we hate this!'" says product manager
Naomi Gleit.
Though Zuckerberg remained opposed to selling the company, many
in his orbit at Facebook felt it was just good business to learn what other
potential buyers might pay. Owen Van Natta was expert at ferreting out
offers. In the late spring of 2006, following the demise of the Viacom
talks, which topped out at $800 million cash, Zuckerberg and the board
concluded that if someone bid $1 billion cash for Facebook they would
consider it seriously. Zuckerberg agreed partly because he was worried
that the failure of the work networks might mean that his baby wasn't
destined to be as big as he'd thought.
Meanwhile, a few towns south, in Sunnyvale, Yahoo's executives
were worried. They saw social networking taking deeper and deeper
hold even though they had no position there. CEO Terry Semel was
becoming increasingly enamored of Facebook. Chief Operating Officer
Dan Rosensweig had become a fan earlier and had gone out of his
way to get acquainted with Mark Zuckerberg in 2005. On more than
one occasion Rosensweig made it clear that Yahoo would talk about an
acquisition if Zuckerberg were interested. He wasn't.
By June, Yahoo's executive team unanimously concluded they should
buy Facebook. Semel approached Zuckerberg and they began talking. It
quickly appeared possible that Yahoo might be willing to pay $1 billion.
Semel, Rosensweig, and Yahoo Chief Strategy Officer Toby Coppel embarked
on a series of negotiations with Van Natta, Cohler, and Zuckerberg,
many of the meetings taking place at Van Natta's Palo Alto home.
(The CEO's furniture-free one-bedroom apartment wasn't suitable.)
Zuckerberg didn't know whether to feel celebratory or defiant. To
express a little bit of both he had one of his product managers buy $500
worth of illegal fireworks for an all-company July 4th party. Setting them
off in a Palo Alto park led to an awkward but fleeting encounter with the
police. The next day Yahoo formalized its offer in a term sheet Semel
messengered to Zuckerberg.
From the perspective of the CEO and allies like Moskovitz, this development
was jarring. Moskovitz, like Zuckerberg, had no real interest
in selling. "The way it was pitched to me," he recalls, "was 'It would be
irresponsible not to figure out what our valuation is. We're not trying to
sell the company.' And that quickly snowballed into, 'Okay, now there
are term sheets and we're going to have to pretend to talk.'"
Board member Breyer saw it differently. This was potentially a
major opportunity for a lucrative "exit," to use the term VCs use when
they make a lot of money. If the deal went through, Accel would make
more than ten times its investment in just fourteen months. "I was calling
for board meetings, calling for discussion," Breyer remembers. "I
said, We have to document this, and go through a process where we
talk about the pros and cons. You can't just dismiss this out of hand. We
have a lot of employees who we're representing. This is real money to
them.'" Of the company's young leaders, he says, "Once the offer came
in, even though that had been our number, they didn't want to do it.
Mark was definitely feeling at that point that he didn't want to sell. So
there was absolutely tension."
At one board meeting, Zuckerberg lost his patience. "Hey Jim, we
can't sell it if I don't want to sell it," he said bluntly.
"I know that, Mark/' replied a piqued Breyer. "But we said our
number was $1 billion. Let's go through the analysis."
Breyer was by no means the only person lobbying for a sale. Again,
there were two camps, and it was mostly older employees versus younger
ones. The relatively older Van Natta and Cohler (in their early thirties
and late twenties respectively) both wanted to sell. Sean Parker,
still a major shareholder, was allied with Zuckerberg and Moskovitz.
He thought Facebook was just getting started. Peter Thiel, older but
very sympathetic toward Zuckerberg, spent hours talking with the CEO
about whether it made sense to sell. Thiel wanted Zuckerberg to consider
it, but remained deferential to the founder. "In the end Peter was
willing to support me," recalls Zuckerberg. "Jim pushed a bit harder.
Pretty much everyone else wanted to sell the company."
Moskovitz, Zuckerberg's longest-standing partner, was one of the
few others firmly opposed to selling. "I was sure the product would
suffer in a big way if Yahoo bought us," Moskovitz says of that time.
"And Sean was telling me that ninety percent of all mergers end in
failure." He and Zuckerberg were also closely following the outcome of
Google's acquisition in early May of Dodgeball, a company that used
cell phones to help you track the physical location of your friends. "We
saw that Dodgeball was going to shit," says Moskovitz. "And Google was
the mecca of start-ups. If an acquisition there was going to fail I didn't
feel great about going to a company that was known for being kind of
behind the times."
Zuckerberg was certain that Yahoo's bid, impressive as it was, would
be seen as way too low if the News Feed succeeded as he hoped it
would. The launch was planned in less than two months, when the new
school year began. And Facebook was also planning at almost the same
time to make another dramatic change —it was going to open itself up
so that anyone could join. No longer would it be necessary to be affiliated
with a college, high school, or workplace network. This open registration
came to be called "open reg." Unlike work networks, it wasn't
simply taking the college model and applying it in a new market. It was
a wholesale shift—declaring that Facebook ought to be for everyone.
The company didn't drop its old structure. It still slotted every user into
a network. But if you weren't in a school or a workplace, you could just
join the network for your city. This would be the true test of Facebook's
broader appeal beyond students.
Cohler and Breyer were both worried that the failure of work networks
might mean that open reg would bomb as well, and that Facebook
would never go beyond the student market. "We were saturated
in college," says Cohler. "We were saturating in high school. MySpace
was very strong in the twenty-something demographic. And Mark had
what felt at the time like a blind belief that large-scale adoption of the
product by adults was just going to work. He had always been right
about those things and many of us had been wrong, up until the work
networks."
If Facebook was not going to jump beyond colleges and high
schools into the broader population, then its growth had almost certainly
topped out. To Cohler that meant the Yahoo offer might be the
best they'd ever see. "Mark, Fm open to having my mind changed," said
Cohler. "Explain it to me."
"I can't really explain it," answered Zuckerberg. "I just know/"
In the opinion of many of the company's more veteran employees
and investors, Facebook had a golden opportunity to capitalize on its
uniquely thorough penetration of the college market. Some said Facebook
looked like MTV in its early years, when its rock-video network
created a new form of media that young people simply couldn't stop
watching. Those who held this view argued Facebook risked undermining
its standing among high school and college kids by inviting a bunch
of uncool adults into the service with them.
Zuckerberg disagreed. His view was consistent and clear—Facebook
needed to go beyond college and become a site everybody could use to
connect with their friends. He and Parker and Moskovitz had been saying
since mid-2005 that Facebook was not meant to be cool, just useful.
If younger people were turned off as the site broadened demographically,
so be it. Zuckerberg knew that people on Facebook weren't very
aware of anyone outside their own social circle anyway. Older people
might join in droves without the average college kid even noticing.
The tension with Breyer and his executives and the gravity of the
question of whether or not to sell to Yahoo gnawed at Zuckerberg.
Some nights, unable to sleep, he would get into his car and just drive,
with his Green Day and Weezer CDs cranked up loud. He spent hours
pacing around the pool at the company house, trying to think things
through. His girlfriend, Priscilla, lying on a nearby chaise one day,
said to a friend, "I hope he doesn't sell it. I don't know what he'd do
with himself." Zuckerberg had a talk around this time with his older
sister Randi, who worked in marketing at Facebook. "He felt really conflicted,"
she recalls. "He said, 'This is a lot of money. This could be
really life-changing for a lot of people who work for me. But we have so
much more opportunity to change the world than this. I don't think I'd
be doing right by anyone to take this money.'"
The negotiations at Van Natta's house continued for the first two
weeks of July. Yahoo's lawyers conducted due diligence on the company's
financials. Finally the two sides reached an agreement in principle
for Yahoo to buy Facebook for $1 billion cash. But for all that, some
on the Yahoo side could tell that Zuckerberg remained unconvinced.
He seemed to be taking his sweet time at every phase of the talks. They
weren't sure he was really willing, despite what might have been hammered
out with Van Natta. They were right. And some of Zuckerberg's
other attitudes frustrated the Yahoo team as well. For instance, one
Yahoo negotiator recalls, "Mark had no interest at all in accommodating
advertising in Facebook's product."
Then all the tension was relieved with unexpected suddenness.
In mid-July, Yahoo announced second-quarter financial results. Wall
Street viewed them as disappointing and knocked Yahoo's stock down
22 percent in a single day. Shortly thereafter, CEO Semel got cold feet,
much as had Viacom's CFO earlier in the year. How would Wall Street
react if Yahoo spent a huge amount on a company with so little revenue?
Semel reduced his bid to $850 million, recognizing it could end
the deal. It did. His deputy Rosensweig called and told Zuckerberg that
Yahoo was reducing its $1 billion offer. As soon as he got off the phone,
a grinning Zuckerberg strode over to Moskovitz's desk a few feet away
and gave a big high-five. In a ten-minute conference call, Facebook's
board rejected the offer. Even Breyer was comfortable with the decision.
As all this was under way, executives at other media and technology
companies were starting to ask if they ought to buy Facebook. Rumors
of Yahoo's billion-dollar bid were circulating.
At Time Warner, discussions about Facebook briefly turned serious.
AOL CEO Jonathan Miller wanted to buy it. He saw community as the
core of AOL, manifested in its chat rooms, forums, and AIM. Facebook
would fit in perfectly, he thought. But AOL was just a division of Time
Warner. Miller couldn't proceed without the concurrence of the parent
company's leaders, who had turned down previous proposals he'd
made for acquisitions. Miller also knew Zuckerberg would not want to
take Time Warner's stock, much derided at the time for performing so
poorly. Any deal would have to be for cash.
So Miller got creative. A partnership with another Time Warner
division, he concluded, might help overcome corporate resistance. He
succeeded in recruiting Ann Moore, CEO of Time Inc., the magazine
division, for a possible joint bid for Facebook. The two concocted a
plan by which each would sell assets to assemble cash for a Facebook
purchase. AOL would sell MapQuest as well as its Tegic software, used
on cell phones to predict words you're trying to key in. Miller hoped to
get as much as $600 million altogether. For her part, Moore would sell
Time Inc.'s British magazine publisher IPC for around $500 million.
Then they'd have enough for a cash bid for Facebook.
But when they brought their proposal to Jeff Bewkes, Time Warner's
president, he shot them down. He said if they could live without
those properties they should go ahead and sell them, then turn the cash
over to the parent company. If they wanted to do a Facebook acquisition
later they should come to him and he would consider it. That was the
end of that. Zuckerberg never even heard about the plan.
As the summer continued, excitement built inside the company about
the twin launches planned for the first weeks of school. Facebook's
News Feed team was putting on the finishing touches. And the people
overseeing open registration had decided to also inaugurate a new way
of getting friends to join you on the service. You would be able to downthe
face-book effect
load your email address book from any of the major email providers —
Hotmail, Yahoo mail, Gmail, or AOL—and with a few clicks find out
who in your address book was already on Facebook. You would also be
able to send emails to anyone who wasn't on Facebook, inviting them
to join. So central was this element that some began referring to open
registration as "Address Book Importer."
Developing the News Feed was by far the most complex and lengthy
project Facebook had ever tackled. But by midsummer a version was
working. One night, sitting in his living room, Chris Cox saw the first
News Feed "story." On his home page was one brief line: "Mark has
added a photo." "It was like the Frankenstein moment when the finger
moves," Cox marvels. The News Feed would eventually be comprised
of a long list of such alerts customized for each user. The conceptual
model for the News Feed was a newspaper that was custom-crafted and
delivered to each user. Facebook called each little alert item a "story."
The software that calculated which stories should go to each user was
deemed "the publisher."
There was extraordinary anticipation at the company as News Feed's
debut neared. Dave Morin, an employee at Apple, was being recruited
by Parker and Moskovitz to join the company at that exact anxious moment.
(Parker may have stopped getting a salary, but his passion for
Facebook's success was unabated.) Morin recalls a conversation with
Parker the night before News Feed launched. "Morin, tomorrow will
be the day that decides whether or not Facebook becomes irrelevant
or becomes bigger than Google," Parker intoned. Moskovitz had a less
portentous thought for Morin. "Tomorrow you're going to love the new
home page so much," he said, "you're going to want to work here for
free!"
Facebook turned on News Feed in the wee hours of the morning
of Tuesday, September 5. Everybody had been working so hard that
the office was a wreck—wires and papers strewn everywhere. The corporate
refrigerator was packed with cheap Korbel champagne for a big
celebration. People pulled it out and began swigging directly from the
bottles. Some people even brought in New Year's noisemakers. This
was something to celebrate. As they pushed the button to officially turn
the feed on, a crowd gathered around a monitor. Zuckerberg was there,
barefoot, wearing a red T-shirt from New York's CBGB's nightclub and
black baggy basketball shorts.
Ruchi Sanghvi, the News Feed product manager, posted an upbeat
note on the Facebook blog, "Facebook Gets a Facelift/' "We've added
two cool features," she wrote guilelessly, "news feed, which appears on
your homepage, and Mini-Feed, which appears in each person's profile.
News feed highlights what's happening in your social circles on
Facebook. It updates a personalized list of news stories throughout the
day, so you'll know when Mark adds Britney Spears to his Favorites or
when your crush is single again. . . . Mini-Feed is similar, except that
it centers around one person. Each person's Mini-Feed shows what has
changed recently in their profile and what content (notes, photos, etc.)
they've added."
Now a user's home page was entirely composed of algorithmically
selected snippets telling them what their friends were up to. Here are
some examples that appeared in users' News Feeds: David Walt added
new photos; Monica Setzer is now single; Amanda Valerio changed her
profile picture; Alex Stedman left the group UCSB Students Against Beer
Pong; Dan Stalman and Alex Rule are now friends; Lauren Chow is attending
The Gods Must Be Crazy; Garrett Tubman is better cause zackie
just cheered him up; and Updated: 14 of your friends joined the group
Students Against Facebook news feed (Official Petition to Facebook).
Yes, there was a problem. Apparently Facebook's users hated News
Feed. After the engineering team pushed the code live, they sat and
watched as reactions from Facebook's 9.4 million users started coming
in. The very first one read, "Turn this shit off!" Photos of the evening
show a celebration suddenly turned sour, as slightly inebriated staffers
stopped gleefully brandishing their Korbel and began glaring at screens
suddenly filled with cascading complaints.
Thus began the biggest crisis Facebook has ever faced. Only one
in one hundred messages to Facebook about News Feed was positive.
At Northwestern University in Illinois, a junior named Ben Parr woke
up Tuesday morning, logged into Facebook, and did not like what he
saw. He quickly created the anti-News Feed group "Students Against
Facebook news feed." "You went a bit too far this time, Facebook," he
wrote. "Very few of us want everyone automatically knowing what we
update . . . news feed is just too creepy, too stalker-esque, and a feature
that has to go." Within about three hours the group's membership
reached 13,000. At 2 A.M. that night, it had 100,000. By midday
Wednesday 280,000 had joined, and Friday it hit 700,000.
And there were about five hundred other protest groups. Their
names included "THIS NEW FACEBOOK SET-UP SUCKS!!!",
"Chuck Norris come save us from the Facebook news feed!," "news
feed is a chump dick wuss douchbag asshole prick cheater bitch," and
"Ruchi is the Devil." At least 10 percent of the site's users were actively
protesting the change.
The primary objection to News Feed was that it sent too much information
about you to too many people. A headline in the Arizona
Daily Wildcat at the University of Arizona summarized: STUDENT USERS
SAY NEW FACEBOOK FEED BORDERS ON STALKING. It quoted a freshman
saying "You shouldn't be forced to have a Web log of your activities on
your own page." And at the University of Michigan, the Michigan Daily
quoted a junior who found it problematic on the viewer's side. "I'm really
creeped out by the new Facebook," she said. "It makes me feel like
a stalker." Many began referring to the service as Stalkerbook. You were
stalked, and you were turned into a stalker. Who wanted that?
The company's first official reaction emerged late Tuesday night.
Zuckerberg wrote a blog post with the condescending headline "Calm
down. Breathe. We hear you." He took a rational line: "We're not oblivious
of the Facebook groups popping up about this (by the way, Ruchi is
not the devil). And we agree, stalking isn't cool; but being able to know
what's going on in your friends' lives is. This is information people used
to dig for on a daily basis, nicely reorganized and summarized so people
can learn about the people they care about." He also noted a point that
to him and his colleagues at Facebook was fundamental to News Feed:
"None of your information is visible to anyone who couldn't see it before
the changes."
The next day television news crews began to gather in front of
Facebook's Palo Alto headquarters building. The company had to hire
security guards to escort employees to and from the office. Students
from several schools were calling for a massive in-person protest there.
Employees were scared. "We had all these conversations/' remembers
Sanghvi. "'Should we shut off the News Feed?7 'Is it going to kill the
company?'" There were earnest debates in Facebook's conference
rooms about whether they should simply block messages about the protest
groups from showing up in people's News Feeds. But Zuckerberg,
in New York on a promotional trip, argued firmly with his colleagues
by email and phone that this was a matter of "journalistic integrity"—to
cut off debate would be contrary to the spirit of openness that led him
to create the company in the first place.
But despite the hubbub, Zuckerberg and everybody else at Facebook
saw one central irony about the episode: that the protest groups
had grown so fast. In itself that was testimony to the News Feed's effectiveness,
they believed. People were joining the groups to protest News
Feed because they were learning about them in their News Feeds. As
Zuckerberg explained it to me at the time, "The point of the News Feed
is to surface trends going on around you. One thing it surfaced was the
existence of these anti-feed groups. We really enabled these memes to
grow on our system." To him it was the ultimate evidence that News
Feed worked as it was intended.
However, such calm and clever logic would not quell the uprising.
So Zuckerberg agreed to compromise. Cox, Sanghvi, senior engineer
Adam Bosworth, and several other engineers spent a frantic forty-eight
hours writing new privacy features that gave users some control over
what information about them was being broadcast by the News Feed.
You could now instruct the software not to publish stories about specific
sorts of actions. For instance, you were able to silence it when you commented
on a photo, or—and this was an important one—when you
changed your relationship status.
Zuckerberg stayed up all Thursday night in his hotel room in New
York writing a new blog post announcing the new privacy controls. It
had a markedly different tone than his first one. "We really messed this
one up," it began. "We did a bad job of explaining what the new features
were and an even worse job of giving you control of them.... We didn't
build in the proper privacy controls right away. This was a big mistake
on our part, and I'm sorry for it." He also announced that in a few hours
he would be participating in a live public discussion about the News
Feed on a group called "Free Flow of Information on the Internet."
The "Students Against Facebook news feed" group peaked that day
at 750,000 members. The demonstrations were canceled. The privacy
controls tamped down the protest quickly.
The News Feed enabled very large groups to form on Facebook almost
instantly. That had never been possible before. And the anti-News
Feed groups were not the only ones that burgeoned that first week. Even
as "Students Against Facebook news feed" was gathering steam, another
one with a more juvenile tone was taking off. It was called "If this group
reaches 100,000 my girlfriend will have a threesome." It reached its
target in less than three days, as awareness spread via the virality of the
News Feed. (The message turned out to be a hoax.) Meanwhile yet another
new group was collecting tens of thousands of new members and
reassuring Facebook employees that there was in fact some redeeming
value to News Feed. It was called "Save Darfur."
Zuckerberg was entirely willing to tweak News Feed, but he never
for a moment considered turning it off. Explains Cox: "If it didn't work,
it confounded his whole theory about why people were interested in
Facebook. If News Feed wasn't right, he felt we shouldn't even be doing
this" ("this" being Facebook itself). But Zuckerberg in fact knew that
people liked the News Feed, no matter what they were saying in the
groups. He had the data to prove it. People were spending more time
on Facebook, on average, than before News Feed launched. And they
were doing more there—dramatically more. In August, users viewed
12 billion pages on the service. But by October, with News Feed under
way, they viewed 22 billion.
The first time I ever met Zuckerberg was at lunch on Friday, September
8, the day Facebook unveiled the News Feed privacy changes.
Only hours earlier he'd posted his contrite letter to users after staying
up all night, and he was shortly to participate in the live question-andanswer
session to help placate protesters.
He was completely unfazed. He arrived at the restaurant wearing
a short-sleeved T-shirt decorated with a whimsical image of a bird on a
branch. He immediately launched into a confident peroration about social
networking and how Facebook fit into it; he almost disregarded the
fracas he'd spent the preceding days trying to tamp down. His rhetoric
was big-picture and visionary. Almost offhandedly, he shared his dispassionate
analysis of why Facebook's users were so mad about News Feed.
He said that he hadn't anticipated the uproar because he had thought
users would realize that nothing on News Feed hadn't already been visible
on Facebook in the past; it was just better organized and presented.
But he now realized, he said, that this argument was only hypothetical.
It was apparent that people felt that normal obstacles to intrusiveness
had been improperly removed. He was starting to realize that users take
time to get used to changes, no matter how inevitable or necessary they
might seem to him.
News Feed was more than just a change to Facebook. It was the harbinger
of an important shift in the way that information is exchanged
between people. It turned "normal" ways of communicating upside
down. Up until now, when you desired to get information about yourself
to someone, you had to initiate a process or "send" them something,
as you do when you make a phone call, send a letter or an email, or
even conduct a dialogue by instant message.
But News Feed reversed this process. Instead of sending someone
an alert about yourself, now you simply had to indicate something
about yourself on Facebook and Facebook would push the information
out to your friends who, according to Facebook's calculations of what
was likely to interest them, might be interested in the activity you were
recording. And for the recipients of all this information, looking at their
Facebook home pages, this new form of automated communications
made it possible to stay in touch with many people simultaneously with
a minimum of effort. It was making a big world smaller.
In essence, what Facebook had created was a way to "subscribe"
to information about a friend. Instead of waiting for a friend to send
you information, now you told Facebook—merely by being friends with
someone—that you wanted to hear about them. To friend them was
to subscribe to their data, so that Facebook's software would pull their
information to your page. The main precedent for such a subscription
model was the first well-known system for feeds —RSS (Really Simple
Syndication). RSS had become popular along with blogging a few years
earlier. It was a way to subscribe to the output of a given blog or website.
RSS feeds had become a routine way for Web denizens to receive
news, commentary, and many other types of information. Applying it to
behavioral information about people, however, was a radical departure
for the Net and would prove to be hugely influential.
But in their anger about the News Feed students were nonetheless
recognizing something important and, for many, genuinely disturbing—
when people can see what you are doing, that can change how you behave.
The reason the News Feed evoked something as intrusive as stalking
was that each individual's behavior was now more exposed. It was as if you
could see every single person you knew over your backyard fence at all
times. Now they could more easily be called to account for their actions.
Facebook had acquired the power to push people toward consistency,
or at least to expose their inconsistencies. Once everything you
do is laid out in chronological order for your friends to see, that may
allow people to recognize things about you that they never previously
knew, whether for good or ill. If you smoked a joint and a friend happened
to snap a photo, that photo might get posted on Facebook. If you
held a party and didn't invite a friend, they were now more likely to find
out about it. You were asked to declare whether you were "in a relationship"
or "single." You couldn't tell one girl one thing and another girl
another. Any change in your relationship status would get pushed out
on the News Feed.
Another reason many Facebook users were upset with the News
Feed was more unsurprising—they had accepted too many "friends."
Facebook was designed as a way to communicate with people you already
knew. But for many it had instead become a way to collect friends,
even a competition to see who could have the most. But if your behavior
was going to be broadcast to everyone on your friend list, people who
had engaged in rampant friending now had little control over who saw
into their private lives.
In his planning for News Feed and his response to the revolt, Zuckerberg
established a pattern he would repeat in future controversies. He
pushed for News Feed out of his conviction that it was the logical next
step for the service. He did not give sufficient consideration in advance
to how it would impact users' sense of privacy, and more importantly,
how it would make them feel. Not everyone appreciated the transparency
that Zuckerberg envisioned. One person's openness was another
person's intrusiveness. Zuckerberg resisted criticism at first, then capitulated
and turned contrite. In the end he embraced dialogue with the
protesters. Facebook's iterative approach to all things prevailed. And
more or less, all was well.
Despite the rocky start for News Feed, Zuckerberg considered it critical
that Facebook continue expanding its reach. He still wanted to move
quickly toward open registration. He wanted this not because he wanted
more users so Facebook could make more money; instead he thought
that Facebook was more useful as it acquired more users. At lunch on
September 8 he said, "Whenever we expand the network, that makes
the network stronger."
Zuckerberg also never considered mothballing the open registration
plan. He and his colleagues, Chris Hughes and public relations
manager Melanie Deitch, did debate among themselves at our lunch
whether to open up as planned the following week or to delay open reg
to allow the News Feed hullabaloo to die down.
In the end Zuckerberg delayed open registration by just two weeks,
until September 26. That was partly so that additional privacy controls
could be added to ensure that student users didn't feel that new, older
users coming in following open registration would shadow them. He
wasn't going to make exactly the same mistake twice in one month.
But there was another distraction during those same weeks that took
up a lot of Zuckerberg's time—Yahoo returned. Even after the company's
stock had plummeted in July and it had retreated from its billiondollar
offer, CEO Semel still badly wanted to own Facebook. He and
his staff watched the explosion of the News Feed controversy and its
rapid denouement as Zuckerberg deftly addressed the objections. They
were impressed. Separately, Yahoo's stock had regained more than half
the value it lost in July, bolstering Semel's nerve.
Now Sernel reapproached Zuckerberg with the surprising news
that he wanted to renew his original $1 billion purchase offer. He even
suggested he might go higher. This was a new situation.
Though Zuckerberg had stayed coolheaded during the News Feed
crisis, the young CEO was now unnerved. His users suddenly seemed
less predictable. And the failure of the work networks continued to gnaw
at him. He was losing confidence in the prospects for open registration,
which would launch in mere days. And he had promised the board he
would take a billion-dollar offer seriously.
Zuckerberg and Breyer had a blunt conversation. Both clearly recalled
the stress of the earlier negotiations. Zuckerberg began to wonder
if in fact he ought to sell the company. "I want to keep our options
open," he told Breyer. "If the number of users and engagement is not
growing steadily after open registration, maybe that billion or billionone
is something Fd want to do."
Open registration and the launch of the address-book importer became
a make-or-break test of Facebook's long-term viability. Would it flop
as work networks had? Were adults ever going to want to join Facebook?
Open registration launched on September 26. Every day for the
next two weeks, a group of six pored over the latest data. The group included
Zuckerberg, Breyer, Peter Thiel, COO Van Natta, "consigliere"
Cohler, and co-founder Moskovitz. In the last few days of September
the data was nerve-rackingly unclear, which meant that a sale might
be imminent. Yahoo's lawyers were again conducting due diligence,
getting ready for a deal. Sean Parker was watching closely from the sidelines,
appalled. "We almost took the offer," he says. "It was the only time
Mark felt he couldn't withstand the pressure from his teammates."
But Zuckerberg's confidence in Facebook's strategy was again vindicated.
One colleague remembers being in the CEO's all-white private
conference room during these weeks when somebody burst in and announced
"Ten million! This is so great!" Reaching that many users was
a major milestone in the company's growth.
After about a week it was apparent that not only were adults joining
Facebook, but once inside they were inviting friends, posting photos,
and doing all the other things that active users did. They were engaged.
Prior to open registration, new users were joining at a rate of about
20,000 a day, but by the second week in October the figure was 50,000.
And students didn't rise up against the new adult users as some had
feared. Perhaps the News Feed ruckus had worn users down. Or maybe
they were so busy checking out all the stuff they were learning about on
News Feed that they didn't have time to protest.
Breyer, in particular, was assuaged by the results of open registration.
"Opening it up kicked in new usage," recalls Breyer. "At that point,
it was pretty much game over. Our growth numbers looked good. And
we just said, We're not ready to sell/"
The company may have remained intact, but some of Zuckerberg's
relationships did not. In the months that followed, his dealings
with Breyer were strained. Van Natta had pushed so hard for a sale to
Yahoo that Zuckerberg never fully trusted him again, according to one
of Zuckerberg's close friends. Van Natta remained as COO for another
year. Even Cohler, one of Zuckerberg's closest confidants, felt the tension.
For a while Cohler was excluded from the inner circle. Says an
adviser to Zuckerberg, "Mark is all about loyalty to the company, and
if you want to sell the company you're not friends to Mark Zuckerberg.
Mark remembers everybody who was in favor of the Yahoo deal."
But in the wake of that tumultuous September of 2006, Zuckerberg's
stature as a leader soared at Facebook. Many employees even
began to view him with a touch of awe. Everyone knew he had been
resolute about both News Feed and open registration. Says one senior
executive, speaking of Zuckerberg's response to the News Feed protests,
"It was a moment of greatness for Mark. It cemented him as the person
who would run this company forever. He looked at his conscience and
came up with a great compromise so people could better control the information
being shared. That completely silenced everyone, and within
a few days the whole thing had blown over."
And while many of the company's 130 employees wondered if it
made sense to turn down Yahoo—after all, many would have become
multimillionaires if Zuckerberg had agreed to sell—the company's
forward progress now started to acquire an air of inevitability. Board
member Breyer began to allow himself to envision a much grander
Facebook that spanned the entire Internet, a vision he'd resisted in the
past. Naomi Gleit, a product manager who had been opposed to News
Feed, voices the feelings of others: "He was just two steps ahead of everybody
else," she says. "He had pushed the company, and gotten lots of
negative feedback. But he had been right."
Zuckerberg himself remembers the anxiety of the Yahoo talks. "It
was one of the most stressful times," he says, in an uncharacteristic acknowledgment
of his own anxieties. He worried how employees would
react when he and the board decided not to sell. "I was really lucky
because a lot of times when a company goes through a hard decision
like that it can be years until it's clear that you made the right decision.
Whereas in this case it was pretty clear very quickly."
At one staff meeting during those chaotic weeks, when Facebook's
ability to maintain its momentum seemed so precarious, twenty-twoyear-
old Mark Zuckerberg showed a candor that both surprised many
of his colleagues and endeared them to him. "It may not make you
comfortable to hear me saying this," he said, "but Fm sort of learning
on the job here."
For its holiday party that December, the entire company, now
about 150 people, took buses to the Great America Theme Park in
nearby Santa Clara. From the minute people got on the buses they
started drinking. By the time they arrived at the park many were already
drunk. Facebook's employees celebrated a successful year on the park's
thrill rides that spun, dropped, twisted and inverted them. On the way
home an employee threw up in an air vent of one of the buses. The
company had to pay several thousand dollars to repair the damage. It
was, in a way, Facebook's last gasp of amateurism. The company had 12
million active users. It had passed the point where it could be run like
a dorm-room project.