Facebook Case Study

Powerful Essays
Topics: Facebook
Facebook was launched in February 2004 by Harvard undergrad students as an alternative to the traditional student directory. Its popularity quickly spread to other colleges in the US by word of mouth, and the site now registers close to 15M monthly UVs and over 6B page views per month. Facebook has completed two rounds of venture financing at very high valuations, the first at a valuation of ~$100M and the second at ~$550M (valuations are unconfirmed). These valuations were driven by the multiple acquisition offers that Facebook has reportedly turned down (the latest was a rumored $750M offer). Facebook is already generating significant revenue, so despite all the valuation and web traffic metric hype, it has also established a very real business.
Interviews conducted: Noah Kagan, early product manager for Facebook. Noah will soon release an e-book on Facebook, with good insight on the social networking space. You will be able to download the book at Noah’s blog, okdork.com. I have had plenty of informal conversations with people close to Facebook over the last two years, while not formal interviews, I would regard these as quality sources – employees, investors, and competitors.
I would also like to thank Nick Macey, a student at the University of Utah for helping in the research and writing of this case study, and providing the ever valuable user perspective as a current college student. Nick will be helping with some of the writing on Startup Review in the future.

Key success factors
Provide pre-existing offline community with a complementary online service
Facebook had its initial success with college students by providing an information service that was not available offline – an interactive student directory containing each student’s class schedule and social network. Before Facebook added the feature sets it has today, it was simply a more complete student directory. Facebook did not create a community where one never existed before; rather they

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