Home' Technology Review : July August 2008 Contents FEATURE STORY
TECHNOLOGY REVIEW JULY / AUGUST
March With $400,000 in seed
money, Internet entrepreneur and
former Netscape engineer Jona-
than Abrams launches Friendster.
May Former PayPal executive
VP Reid Hoffman sends out the
first invitations to join business-
networking site LinkedIn.
August Brad Greenspan, Chris
DeWolfe, and Tom Anderson of
community website conglom-
erate eUniverse (later Inter-
mix Media) create MySpace.
October In its first six months,
Friendster has attracted about
1.5 million users. Google offers to
buy it for $30 million, but Abrams
declines, instead raising $13 mil-
lion in venture capital. Friendster
is valued at about $53 million.
November Time declares Friend-
ster one of the "Coolest Inventions
of 2003," as social network-
ing begins to go mainstream.
site Hi5, which grew out of a
matchmaking site for South
Asian singles launched in
January 2003, goes live.
January Google rolls out the beta
version of a social-networking site
called Orkut, designed by Google
engineer Orkut Buyukkokten.
February A Harvard sophomore
named Mark Zuckerberg launches
thefacebook.com, the original
For social-networking sites, targeting will necessarily entail
getting "between" users, as Seth Goldstein put it. You come to a
social network because you are interested in your friends; ergo, the
thinking goes, in order to get your attention, advertisers need to let
you know what your friends are buying or thinking about buying,
or they must somehow get you to send each other ads. It's either
a beautiful idea or a creepy one, depending on whether you're an
ad executive or the user of a social network.
In November 2007, Facebook tried to get between its users
with its Beacon program. Announcing the program in New York,
Facebook founder Mark Zuckerberg declared, "The next hundred
years will be di erent for advertising, and it starts today."
Beacon was an advertiser's dream---and, like many things that are
good for advertisers, very annoying to ordinary folks. Working with
commercial websites like Blockbuster and eBay, Beacon tracked
Facebook users' purchases and displayed them to their friends.
The problem was that users were enrolled in the program auto-
matically. If a user went to, say, the Blockbuster site and rented a
movie, that information was automatically sent to everyone in
her Facebook network. (That's what happened to Cathryn Elaine
Harris of Dallas; she is suing Blockbuster for violating the Video
Privacy Protection Act.) Online petitions and negative press ensued,
and the program was clumsily scaled back. On the company blog,
Zuckerberg wrote, "We've made a lot of mistakes building this fea-
ture, but we've made even more with how we've handled them. We
simply did a bad job with this release, and I apologize for it."
Still, "Beacon is alive and well," says Chamath Palihapitiya,
Facebook's vice president of product marketing. "What happened
was unfortunate," he says. "We took a step back and tried to figure
out how to improve it." Now it's an opt-in system, and users can
choose what information to share---or whether to participate at all.
About 30 companies are still with the service, he says.
Most of the industry members at EconSM liked Beacon, wished
it had worked better, and felt it would work eventually; Goldstein
called it a "sign of things to come." But maintaining the user's trust
in how data is used is paramount, says Roger McNamee, a venture
capitalist who made early bets on companies like Electronic Arts
and Intuit. "Facebook is so much more personal than Google," says
McNamee, who invested in Facebook and is a confidant of Zucker-
berg. "It really matters to people how their information is used."
Not every attempt at targeting has aroused as much protest as
Beacon. In 2007, MySpace launched its HyperTargeting system,
which scans users' profiles for information about their interests and
demographics. It sorts the profiles into 10 rough categories---such as
version of Facebook, to con-
nect students at the university.
May Plaxo, cofounded by Napster
cofounder Sean Parker, receives
$7 million in financing from Cisco
Systems, Sequoia Capital, and
others to build up its net-
work of users of contact-
June Having spread
to Stanford, Columbia,
and Yale, Facebook
moves its operations
to Palo Alto, CA.
Former NBC executive Scott
Sassa replaces Abrams as CEO
of Friendster in a bid to make
the service profitable; the com-
pany goes through two more
CEOs in the next four years.
wife team Michael and
Xochi Birch launch Bebo.
April Facebook, having expanded
its reach to hundreds of col-
leges and universities, secures
$12.7 million in venture capi-
tal from Accel Partners.
July Rupert Murdoch s News
Corp. buys MySpace par-
ent company Intermix
Media for $580 million.
Andreessen and Gina
Bianchini launch Ning, a customiz-
able social-networking platform.
April Facebook, now with millions
of active users, raises $27.5 million
in another round of venture capital.
May Facebook expands beyond
schools for the first time, add-
ing workplace networks.
August Google outbids Micro-
Timeline of key events
in the rise of social-
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