Image from: http://i.telegraph.co.uk/multimedia/archive/01299/Facebook_1299512c.jpg 

Founded in 2003 by Harvard student Mark Zuckerberg and his friends,¹ Facebook has quickly become the social networking website. This innovative product reinvented the social media market, offering a new approach as to how people interacted and communicated online.

Zuckerberg’s risky entrepreneurial venture grew extremely profitable. Yes, while Facebook offers its services to users for free, it has been generating a positive cash flow² since 2009—mainly through revenue generated from advertisements. With a user base of over 800 million users, it is no surprise Facebook posted advertising revenues of 1.86 billion in 2010³, as companies paid huge sums to tap into an ever-expanding customer base.

Creating the “hottest” social platform had its risks. For Zuckerberg, there was no way to foresee just how popular the website will become. There was always a possibility of consumers walking away after a first glimpse. Furthermore, as Facebook’s user base continued to lag behind Myspace’s (8 million vs. 100 million in August 2006), Zuckerberg was offered $1 billion from Yahoo to sell.⁴ He turned the money down, convinced that Facebook could be worth more without Yahoo. He was right. Through Zuckerberg’s vision and hard work, Facebook evolved into the successful business it is today.

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1. http://www.guardian.co.uk/technology/2007/jul/25/media.newmedia

2. http://www.facebook.com/blog.php?post=136782277130

3. http://mashable.com/2011/01/17/facebooks-ad-revenue-hit-1-86b-for-2010/

4. http://www.wired.com/techbiz/startups/news/2007/09/ff_facebook?currentPage=all