If there's one thing Facebook
generates, besides selfies and baby pics, it's lots and lots of press.The company has more than one billion users, one of tech's most recognizable CEOs (still only 29!), and enormous stores of your personal data. Like it or not, we all seem to have a stake, whether big or small, in what happens at Facebook's Menlo Park, Calif., headquarters. It makes sense, then, that the social network keeps us all, reporters and readers alike, busy week in and week out.
The company has a reputation for changing its product regularly, and this year was no different. Facebook's 2013 activities ran the gamut from the good (Graph Search), to the bad (Facebook Home), and, of course, the ugly (its misuse of an extremely sensitive image in an ad).
On the business side of things, Facebook stock experienced a resurgence as it collected a number of noteworthy headlines, including the company's first ever Fortune 500 Ranking (#482) and its one millionth advertiser.
CEO Mark Zuckerberg outlined his vision for bringing Internet access to all corners of the globe in 2013, a pledge that could bring great opportunity to the masses — and a few more billion users to Facebook.
The company's motto remains "Move fast and break things," and Facebook seems to be breaking things with less frequency, while moving faster than ever. Here's a look back at the top Facebook headlines that kept us captivated over the past 12 months.
Tangling With the NSA
Facebook found itself in the middle of the year's top tech crisis when reports surfaced in Junethat companies like Facebook, Apple and Google were granting government access to private user data. Facebook denied the reports (along with all the other companies mentioned), but the NSA surveillance program, known as PRISM, dominated the headlines for many weeks following the initial allegations.
Following the revelations, it was Facebook's turn to share information. Less than two weeks after the original PRISM stories ran in the Washington Post and The Guardian, Facebook released its own report, claiming the company receives nearly 1,500 requests for user data per month.
In August, Facebook released its first ever Transparency Report, documenting the number of users included in information requests. (Facebook, along with other tech companies like Google and Microsoft, publicly asked the government for permission to provide even more details.)
In an interview with The Atlantic in September, Zuckerberg shared that the NSA's report affected users' trust in Facebook. "There's a lot of times where ... someone will criticize us in the press over privacy. What we've found is that stuff tends to not actually move the needle that much on the brand perception around trust," he said. "The NSA stuff did."
Facebook's Teen Problem?
It was a story line that took center stage during the company's latest earnings call at the end of October — is Facebook losing out on teen users? The stock dropped dramatically after CFO David Ebersman hinted that there might be a slight issue retaining younger teens on the platform. "Youth usage among U.S. teens was stable overall from Q2 to Q3, but we did see a decrease in daily users partly among younger teens," Ebersman said. And based on anecdotal evidence, it appears the conversation is one that teens themselves are struggling with.
The stock market reacted, erasing a 15% gain the stock was riding in after hours trading. (Some believe the stock drop was a result of Facebook saying it wouldn't increase the number of ads on the platform moving forward; in reality, both comments most likely caused the dip.) Either way, Facebook's mention of teen use declining, even within a small subset of "younger teens," coupled with Facebook's reported failed bid for Snapchat, doesn't scream confidence that teen users are using the site as much as they once did.
The moral of the story: It's something to pay attention to, says Brian Blau, research director for consumer technology at Gartner. "It's a serious issue and it's a long-term issue," he says. "If we do actually find out that there is a big gap there, a gap in usage, I'm guessing that Facebook will have some kind of answer for that. You can probably guess that if they're going to admit that there's a problem, then they're going to have a solution."
Home (Not So) Sweet Home
It's hard to believe Facebook Home was just unveiled in April, mostly because few people still talk about it. Facebook Home, which came pre-loaded on the HTC First (earning it the nickname "Facebook Phone"), works with Android smartphones to bring Facebook updates and features directly to the phone's home screen.
Some features of Home (like Chat Heads) have been a success, and were incorporated into later versions of the mobile app. Overall, however, Facebook Home received negative reviews, and rumors even circled that the HTC First, the phone that came with Home preloaded, has been discontinued. (An HTC spokesperson denied the allegation in September, but the phone's price dropped to just $0.99 in May.)
Facebook Home has been an abysmal failure," Blau toldMashable in September. "Maybe they had some really great ideas there, but they just didn't deliver it in the right package or the right way."
Graph Search Is Born
Graph Search rolled out in January, and may turn out to be Facebook's most interesting feature in 2014. There is a preponderance of personal user data on Facebook, and Graph Search is the first tool that really comes close to letting users harvest that information for personal use. It's a search engine within Facebook, and the smarter Graph Search becomes, the more benefit users will get from engaging with it.
A serious down side of Graph Search is that it's not yet on available on mobile. Seeking nearby restaurants that your Facebook friends Like is helpful, but less so when you need to be sitting down in front of a desktop or laptop to utilize the search function.
$FB Success
Facebook's IPO did not go as planned in 2012. In fact, it was rather disastrous. But that narrative is well in the rearview mirror, and those who hung on through the company's tumultuous first months on Wall Street are now reaping the benefits.
After closing on Dec. 31 last year at $26.62 a share, Facebook stock has nearly doubled, closing at $TKTK on TKTK. The company has a market cap north of $133 billion (more than four times that of Twitter), and more importantly, revenues continue to climb quarter after quarter. Facebook was listed on the Fortune 500 list for the first time this year at #482 and it should climb close to 100 places next year based on expected 2013 revenues compared to last year's list.
A Second-Screen Battle
There's a battle raging between Facebook and Twitter, and it's happening in front of your TV. The two companies are competing heavily to provide users with the best platform to discuss live television, a phenomenon known as the "second screen." When you watch The Voice or the Super Bowl, Facebook and Twitter want you talking about what you watch online, on their respective network, and that means having your phone or tablet handy to continue the conversation in the virtual world.
Facebook partnered with Fox Sports in September to bring user polls and comments to professional football and soccer broadcasts (Twitter has a similar partnership with ESPN). Facebook also sends weekly reports to major TV studios like ABC, NBC and CBS to fill them in on which shows are generating the most conversations online, data that should help with advertising revenue and show promotions.
It's an important area of focus for Facebook. Discussions around live television bring more users to the platform by giving them a reason to log in, but they also give advertisers confirmation that Facebook is a place to go for reaching an engaged audience. If users are spending the commercial break scrolling through News Feed, advertisers will want to be there — a fact that is not lost on Facebook.
Mobile Growth
Facebook is vocal about being a "mobile-first" company, and in 2013 it proved the words are more than just a Silicon Valley cliché. The company reported $882 million in mobile ad revenue last quarter, nearly six times as much as Q3 2012, and mobile ads now generate 49% of Facebook's revenue total.
Facebook also added over 250 monthly mobile active users in the past year, and that number should continue to grow in 2014. Facebook was the only social networking app in the Top 10 most-downloaded list from the App Store on both iPhone and iPad this year.
Source: Facebook Q3 Earnings ReportThe Rise of Instagram
Instagram's year was bigger than Facebook's in terms of major rollouts. The photo-sharing app, which Facebook purchased last year for $1 billion, added videos to the service in June,messaging to the service in December, and finally started monetizing with its first set of in-feed ads.
Instagram announced 150 million monthly active users in September, a significant milestone considering the app had 100 million actives in February of 2013. Facebook likely won't admit it (see the teen problem segment above), but it appears that Instagram is the company's biggest weapon against the rising popularity of Snapchat, the photo-sharing app that deletes user photos and videos after they are viewed.
Instagram's new messaging feature, Instagram Direct, now allows private sharing between friends within the app, in many ways mirroring the functionality that Snapchat provides, although the photos do not disappear.
And while the jury is out on whether Instagram Direct will strike a chord with users, the verdict is in on the platform's advertisements — users are not happy, at least in the comments. (Wenoticed this initially when ads rolled out and, based on the comments under recent ads, it appears their rage persists.) The ads are relatively infrequent, appearing approximately once a week from what we've seen, and receive thousands of likes, but they also serve as lightning rods for thousands of angry Instagram users.
A Vanishing Snapchat Bid
Need validation that Snapchat is for real? The photo-sharing app had more total downloads for iPhone in 2013 than Facebook, Twitter and Instagram, respectively. The company claims that users send 400 million "snaps" — images or videos — per day, a number that exceeds Facebook's 350 million daily photo shares. Snapchat does not, however, share data on how many users it has in total.
So it's no surprise that Facebook showed an interest in the company this fall. The world's largest social network reportedly made a bid for the Snapchat — to the tune of $3 billion. That's $2 billionmore than Facebook paid for Instagram last year, another app that wasn't bringing in revenue when Facebook came calling.
The Snapchat guys are crazy for not selling if the rumors are true," says Michael Pachter, an analyst with Wedbush Securities. "Snapchat is a really interesting little service, but it's really hard to say that there will ever be a business model there."
Perhaps Facebook dodged a bullet; or perhaps Facebook's bid was validation that there's something legitimate to Snapchat. Either way, Facebook's addition of Instagram Direct may mean this courtship is over.
Internet.org
Zuckerberg is not the only tech figure responsible for Internet.org, but he is the most notable and outspoken. The Facebook CEO announced the initiative in August with the intention of bringing Internet access to the four-plus billion people worldwide currently without it.
Internet.org's supporting team includes Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung, and the goals include cheaper data plans and more reliable access, particularly on mobile devices.
Some criticized Zuckerberg for being to self-interested, tackling a problem that could also drive lots of business for Facebook. In theory, if the world has more Internet users, Facebook has more potential clients.
"The unfair economic reality is that those already on Facebook have way more money than the rest of the world combined, so it may not actually be profitable for us to serve the next few billion people for a very long time, if ever," Zuckerberg wrote in the Internet.org mission statement. "
But we believe everyone deserves to be connected."
With Zuckerberg's plan to bring the entire world online, and the speed at which the company continues to evolve, it appears Facebook won't be short of headline-grabbing developments in 2014. Or any time in the near future — provided it doesn't break anything that can't be put together again.
