The Facebook Effect

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by David Kirkpatrick


  But shortly Facebook triumphed with News Feed. It enabled your friends to easily learn about your Facebook activities—including which applications you installed on your profile. Only with the News Feed in place could Facebook become a successful platform. Open registration also helped lay the groundwork. Software developers would obviously be more interested in applications on Facebook if it operated at a large scale and included all sorts of people.

  As soon as the News Feed brouhaha settled down, the company’s priorities turned to building the platform. D’Angelo and Charlie Cheever did much of the critical programming work. Dave Morin got the job of “platform marketing”—working with potential developers. (In his previous job at Apple, already a Facebook partisan, he had sought futilely to get Facebook built into the Mac OS.) Morin and Fetterman visited companies that had successfully created platforms, including eBay, Apple, and Salesforce.com.

  But despite all the external models, the team kept harking back to one internal reference point. “We used photos as the model the entire time,” says Morin. “We just kept looking at it, asking, ‘How do we enable every application to do what photos does?’” Each profile page included a box for photo albums. Clicking on a photo took a user to an entire page, which looked much like a website. When you uploaded a photo it updated your personal mini-feed on your profile as well as the News Feeds of relevant friends. So the team decided to allow outside developers similarly to place boxes on profile pages and to build full pages inside Facebook. Actions in any application could, of course, generate News Feed stories.

  Carrying this logic even further, they arrived at the principle that Facebook should not be able to do anything with its own applications that outside developers couldn’t do. It should be a level playing field, Zuckerberg explained in 2007. “We want an ecosystem which doesn’t favor our own applications,” he said. This policy was followed to such an extreme that features were removed from Facebook’s own photos application because an outside developer would not have been able to include them.

  The company extended an extraordinary degree of freedom to its new partners. Amazingly, it planned to let developers make money with their applications, but would not charge them anything at all for the right to operate inside Facebook. “People can develop on this for free,” said Zuckerberg around the time the platform debuted, “and can do whatever they want. They can build a business inside of Facebook. They can run ads. They can have sponsorships. They can sell things, they can link off to another site. We are just agnostic. There are going to be companies whose only product is an application that lives within Facebook.”

  But did it make Facebook a better business? That was not a priority. “We don’t force ourselves to answer the question how we’re going to make money off this right now so long as it’s strengthening our market position,” he said back then. “We’ll figure that out later.”

  So Zuckerberg saw it. But some of his colleagues, particularly the ones who sold advertising for the site, were apoplectic. Why should its application partners be allowed to compete with Facebook itself in selling ads? There were plenty of angry meetings. But for all the venting, Zuckerberg was unswayed. Activity on applications, he argued, would generate more activity in Facebook. That would create more page views, and even on application pages Facebook would reserve space to sell its own ads. Zuckerberg also advocated a sort of corporate Darwinism. He said he wanted outside apps to help keep Facebook honest by forcing it to make its own remaining applications good enough to compete successfully.

  Back then I talked to Zuckerberg in his private retreat—an all-white conference room furnished with midcentury modern furniture from Design Within Reach, a few blocks down University Avenue. (He didn’t decorate it himself, but he liked it.) White Eames chairs, a white Saarinen table with delicate metal legs, white curtains, white blinds, gray rug and sofa, and a big black beanbag chair. Employees called it the “interrogation room” both because Zuckerberg was known for his probing questions and because its austerity evoked a prison cell. It was Zuckerberg’s twenty-third birthday when he and I met there. He was barefoot and unshaven, wearing an A&W Root Beer T-shirt with blue jeans. In a corner was an unopened box of Transformer robot toys. Zuckerberg was drawing diagrams on the whiteboards that covered all the walls, and at one point couldn’t find an eraser. So he picked up a knit hat from the floor and wiped the board with that.

  In April, Zuckerberg had given a talk at a News Corp. executive summit at a resort at Pebble Beach, two hours south of Palo Alto. Rupert Murdoch had recently said a few things in public to suggest he wondered if he had bought the wrong social network. At a gala dinner Zuckerberg and Murdoch huddled together intently, while MySpace CEO Chris DeWolfe sat nervously at a nearby table. Finally Zuckerberg got up, announcing that he had to get back to take his girlfriend to a movie. “After he left, the MySpace guys rushed over to Rupert,” says blogger and author Jeff Jarvis, who attended the dinner. “It was like ‘Dad! Pay attention to me!’”

  Now as the platform launch approached, Zuckerberg made no bones about the fact that it was intended partly to best MySpace, which remained the dominant American social network. MySpace had recently decreed that some third-party applications could not operate there, and even shut one down merely on suspicion that it had been selling advertising. “We just have such a different philosophy and view of the world,” Zuckerberg explained. “We’re a technology company. MySpace is a media company, and they view their job as owning and distributing content.”

  To succeed with the platform launch, Facebook had to start promoting itself to developers. Dave Morin and Matt Cohler crisscrossed the globe visiting start-ups and big media companies alike, seeking to convince them to make software for Facebook. A splashy launch event was planned for May 24, 2007, at a big hall in San Francisco. Facebook called the event f8, a name that subtly proclaimed it was Facebook’s “fate” to become a platform. Zuckerberg even emerged from his shell to solicit advance attention from a journalist, me, whom he invited inside the company for an exclusive story as he prepared for f8. I published an article titled “Facebook’s Plan to Hook Up the World” in Fortune magazine and online at the very moment f8 began.

  Facebook hired a veteran event planner named Michael Christman to oversee the f8 logistics. On his first visit to the offices he was in a lengthy meeting, sitting by the door in a big conference room that also held a flat-screen TV and a Nintendo Wii machine. The door opened and banged into Christman’s back. Two young men appeared but backed out when they realized the room was in use. A few minutes later they came in again, hoping the meeting was over, and again knocked his chair. They wanted to play the video game. When it happened a third time, Christman turned and said sternly, “Boys, if you want to play with the Wii, come in. But don’t bang my chair again.” At that point, Meagan Marks, a Facebook employee who was managing f8, said, “Michael, this might be a good time to introduce you to our CEO, Mark Zuckerberg.”

  The days leading up to f8 were a frenzy of excitement and near panic. Employees were fueled by a sense that they were making history. The graffiti-scrawled halls were abuzz with grand proclamations. “We’re gonna change the Internet!” “We’re gonna make the Internet social!” “We’re gonna finally put people on the Internet!” “We’re creating a real economy on the Web!” Apple veteran Dave Morin remembers driving home one night at 4 A.M after a particularly intense planning session, thinking, “This is what it must have been like building the first Macintosh.” To prepare for the new Facebook, Morin was reading Democracy in America by Alexis de Tocqueville, the classic nineteenth-century observation of the U.S. political and economic system, as well as Adam Smith’s The Wealth of Nations. Modesty of ambition has never characterized successful leaders at Facebook.

  It had been a marathon of programming. Adam D’Angelo and his team building the platform worked seven days a week for more than three months. The night before f8 they were almost—but not quite—ready. A core group crowded into
a room at San Francisco’s W Hotel running through final fixes. Most hadn’t slept for days. But a key piece of the platform software still didn’t work properly.

  Some of the programmers took an alertness drug called Provisual so they could stay up yet another night. They were semidelirious. They joked they should mix Provisual with cocaine and call it Blow-visual. Luckily the quality of their coding was higher than that of their humor. But they made it through the night. Just hours before f8 was scheduled to begin, they flipped the switch. The software worked! Their brains barely did.

  Nobody outside Facebook knew what was coming, except the few partners that had agreed to develop applications in advance. The company had kept the purpose of f8 secret. The only thing most of Silicon Valley knew was that Facebook would make a big announcement. Facebook had never done anything like this before. Hundreds of journalists crowded the front rows. It seemed every software and Internet company in California, and many from farther away, sent a delegation.

  As f8 began, the 750 people throughout the packed room strained to see the diminutive Zuckerberg, wearing his standard T-shirt, fleece jacket, and sandals. He walked out onstage and pronounced, “Together, we’re starting a movement!” It was a phrase suggested by hip San Francisco strategy and marketing consulting firm Stone Yamashita.

  Zuckerberg’s platform demo was by far the best-rehearsed presentation he had ever given. He’d slaved over his wording, but continued modifying his slides until minutes before he was scheduled to appear. He was extremely nervous. Everybody would be watching, even his parents, who were in the audience. But he paid a price for his last-minute modifications. When he got onstage the slides appeared in the wrong order and his speech got out of synch. He paused and looked confused. The event staff and Facebook’s executives held their breath. “Well, this worked in my office . . .” he joked. The tension defused. The correct slide came up. He finished smoothly.

  The platform wowed the crowd. It took Facebook way past MySpace. No other consumer website had anything like this. Rapturous coverage instantly began sprouting on blogs and journals all over.

  A solid ecosystem had already started coming together. More than forty companies demonstrated applications. Mighty Microsoft showed two apps that helped integrate existing Internet software with Facebook. The Washington Post (who else?) showed a “political compass” to compare your political views to those of your friends. Sean Parker teamed up with Zuckerberg’s old Harvard dormmate Joe Green to make an application called Causes, to help nonprofits raise money. Another big partner at the platform launch was iLike, which had previously built its own social network to share songs and musical favorites.

  Immediately afterward, f8 turned into an eight-hour public hackathon, where any developer could work alongside Zuckerberg and Facebook’s programmers to build software on the fly. (That was another reason it was called f8.) But when the event ended at twelve, the night was not over for the Facebook crew.

  They retired again to the W Hotel, where they proceeded to, as they said, “push the platform live,” meaning turn it on. Staffers scattered throughout conference rooms to do various necessary tasks, while Moskovitz and Morin sat on a sofa in the lobby working from their laptops via the hotel Wi-Fi. Once the platform was working they crashed, though not before a little partying, of course.

  Dave Morin awoke blearily the following morning to find a string of panicked messages on his cell phone. “We have so much traffic we don’t know what to do!” said one from an executive at iLike. “Can you help us get more servers?” Apparently just about every application launched the day before was having trouble under the strain of a massive influx of users. Morin headed developer relations, so the companies wanted his help. iLike’s executives flew down from Seattle and rented a U-Haul truck, which they drove around Silicon Valley borrowing servers from various tech companies so they could handle the load. By Friday, the day after f8, 40,000 Facebook users had installed the iLike application. Two days later, the figure had soared to 400,000.

  Morin got help from the company that ran Facebook’s South San Francisco data center. Facebook itself occupied a series of what are called “cages”—fenced-in indoor enclosures full of servers and networking equipment. An adjacent cage was made available to any developer that needed help managing its traffic. Eventually Facebook did a deal with a larger data center operator to open an entire facility for application partners, which would be, in Internet lingo, “peered” with Facebook’s, meaning that in the electronic topography of the Net it was essentially right next door.

  The reaction to f8 across the tech industry was close to ecstatic. Facebook’s platform launch became—along with the launch of Apple’s iPhone a month later—one of the two most-discussed tech events of the year. No longer was it possible to dismiss this upstart as merely a plaything for college kids. The influential blog TechCrunch called the platform “inspired thinking.” Prior to f8, Zuckerberg and his crew had hoped that in the subsequent year 5,000 applications might come onto Facebook and half its users would install them. But within six months 250,000 developers were registered, operating 25,000 applications.

  Just as Zuckerberg had predicted, Facebook gave applications an unusual ability to acquire new users. This was the vaunted “distribution.” The News Feed told users when their friends had installed new applications, so even the most modest app from a single developer with no marketing budget could reach millions of users almost overnight if it did something useful. Though the News Feed still was a selection chosen by algorithm, Facebook tuned the software to make sure that newly installed applications were announced. By six months later, half of Facebook’s users had at least one application on their profile.

  Just about every software and Internet company was suddenly talking about building an application for Facebook—from industry titans to college kids in their dorm room. Facebook’s platform infrastructure made it almost as easy for such lone wolves to create an application as for Microsoft. When it launched the platform, Facebook turned off its own Courses application, which helped college students track one another’s class schedules. A New Jersey high school student named Jake Jarvis, seeing opportunity, quickly wrote something similar and six months later sold it for an amount his father says was “sufficient to pay for a year in college.”

  The platform brought Facebook a gravitas it never before possessed. It caused both technologists and ordinary users to sense that this service was more than they’d reckoned. In Silicon Valley and among techies worldwide, it suddenly became uncool not to have your own Facebook profile.

  The platform also changed the experience of being on Facebook. There was a new expansiveness, an air of possibility. If adding the photos application had made Facebook feel like a place where you wanted to spend a lot of your time, turning it into a platform for applications began to make it feel a bit like being on the Web itself. Facebook was becoming its own self-contained universe.

  For high school and college students it had long been routine to spend the majority of their online time there. Now people of all sorts and of all ages began to do the same. On the day of f8—May 24, 2007—Facebook had 24 million active users, with 150,000 new ones joining every day. The demographics were already spreading out, with 5 million users between twenty-five and thirty-four, a million between thirty-five and forty-four, and 200,000 over age sixty-five. Within a year Facebook tripled to more than 70 million active users.

  In all the complex and frenzied preparations for f8, Zuckerberg and his team had given surprisingly little thought to exactly what kinds of applications were likely to work best on Facebook. As is so often the case at this company, driven by ideals and led by a CEO obsessed with a long-term view, high-mindedness prevailed. The Facebook team assumed that general-purpose applications with wide functional appeal would play a big role in the new ecosystem. When they prepared for f8 by taking proprietary features out of their own photos app, for example, they believed that someone might come along with a better o
ne and successfully compete against them. Their idea was that this should be a forum for the best, most functional, most sophisticated applications. When I was reporting in 2007 prior to f8, Facebook had me speak with one close ally of the company, who told me, “Facebook is creating the opportunity to build a whole generation of Adobes and Electronic Arts and Intuits that live within Facebook.” These were the giants of the industry. As usual, the company was aiming high.

  Facebook, however, is nothing more than the collective actions of its users. What happens there depends on what Facebook users are interested in, not, in the end, what Mark Zuckerberg thinks they ought to be interested in. With Facebook’s platform, he learned that lesson a bit painfully.

  A frenzy of new applications quickly emerged on Facebook, but they were hardly high-minded. The ones that took off fastest were mostly silly, but intrinsically social in a way that games on the Web had never been before. One of the first really hot apps was one called Fluff Friends. It didn’t do much more than let you electronically “pet” a virtual dog or cat, but when you pet your friend’s dog your photo would show up on their profile. It was a new way to send a simple message, which 5 million people did. Another similar app enabled you to give your friends a “vampire bite.” Food Fight helped you throw food at your friends, and reached 2 million users in just a few weeks. A silly little app called Graffiti—which let you scribble on friends’ pages—became the number-two application. A couple of young guys in San Francisco wrote it in a couple days in their apartment.

 

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