Top 10 Facebook Stories of 2007

To say it’s been an eventful year in the world of Facebook and the Platform would be quite an understatement. 2007 saw the birth of a new way of building and distributing software on the web that spurned on the imagination of entrepreneurs and awoke industry giants. In the future, we may look back on this year as a time of “social networking frenzy” that turns out to be more hype than substance. Or, we may look back on it as a time when the way the people use the Internet changed.

Here’s a look at the top 10 Facebook stories of 2007, as told through the eyes of a product manager in Silicon Valley:

1. Facebook launches Platform, intends to become “social operating system”

On May 25, Facebook unveiled the “Facebook Platform” at f8 in San Francisco. Dozens of apps were showcased from several launch partners. Breaking from the command-and-control approach to third party widgets employed by others at the time, the Platform allowed deeper integration points than any other API, and allowed anyone to sign up and start developing–and keep all the revenue. Hundreds of developers gathered for an all-day hack-a-thon to kick the tires on the new Platform, and by the end of the year, over 10,000 applications had been launched.

2. Facebook Platform becomes the most viral software distribution system ever

Within two weeks, music application iLike added 1.7 million users, making it one of the fastest growing applications on any platform ever. Within three weeks, an astounding 10 applications added over 1 million users each. Software developer Craig Ulliott, creator of the then-side-project Where I’ve Been application, asked, “I have 250,000 users, now what?” as his servers crash under the traffic load. 65 million applications were installed in the first month – an average of 2.5 per user. By December, that number had risen to over 700 million.

3. Facebook user base, traffic numbers soar

After the Platform launched, traffic and new users to Facebook soared: after three weeks, page views increased by a third. The post-college crowd helped Facebook’s reach double from 2006 to 2007. Facebook’s total userbase grew from about 15 million in January to 30 million in July. In December, it stood at about 58 million. Facebook added an average of 250,000 new users per day in 2007.

4. Facebook’s News Feed offers a new paradigm for sharing information (and marketing)

When the Mini Feed and News Feed launched in September 2006, users were concerned by what it meant for privacy. Since then, the News Feed has come to be accepted as one of the most important advances in social networking technology. Facebook filters an average of 30,000 story candidates into a customized stream of 60 stories for each user every day. For social networking marketers, getting into the News Feed has become just as important as getting into the first page of Google’s search results.

5. Facebook Platform creates an application economy

When Facebook announced the Platform, it announced that application developers could keep 100% of the revenues their apps generate. This, in turn, led to a frenzy of early acquisitions and investments. Just a month after the Platform launched, SideStep acquired Extended Info. Shortly thereafter, Slide bought Favorite Peeps for $60,000, the first publicly reported transaction price. Lee Lorenzen started a trend by making Altura Ventures “the first Facebook-only VC.” In July, Bay Partners launched AppFactory to invest in Facebook application developers. Over the course of the summer, several ad networks were started to sell Facebook application inventory. In September, Mark Zuckerberg announced the formation of the fbFund, a Facebook-affiliated fund specifically set up to deploy grants to innovative application creators.

6. Google organizes OpenSocial, Facebook opens Platform architecture

After failing in its bid to partner with or invest in Facebook, Google announced the OpenSocial API, an open API that would allow application developers to build apps to run on multiple social networks. However, manged by a consortium of companies, OpenSocial has failed to get off the ground due to an incomplete spec, and the first social networks supporting it are not expected to be ready until early next year. Meanwhile, in December, Facebook announced it was opening its Platform architecture for adoption by other social networks, and Bebo launched its platform by announcing it was completely adopting Facebook’s architecture from the start.

7. Microsoft invests $240 million in Facebook at $15 billion valuation

In a major strategic coup over Google, Microsoft won a minority stake and an expanded advertising relationship with Facebook in October. The price? A mere $15 billion valuation – or about 100x TTM revenues. (Facebook execs allegedly played the two off each other masterfully, driving the valuation way up.) Rumors that Facebook also took $500 million from two hedge funds proved to be false, but the company did take $60 million from Chinese billionaire Ling Ka-Shing in December.

8. Facebook backtracks on Beacon

With a splashy launch in New York, Facebook announced several new advertising products for businesses in November. One of them, Beacon, was particularly aggressive: it allowed partner sites to send information about a user’s off-Facebook activity to Facebook for sharing in that user’s News Feed. After privacy advocates spooked advertisers by complaining that the program was opt-out instead of opt-in, Facebook reversed course.

9. Facebook lures top talent

Planning to increase head count to over 700 by the end of 2008, Facebook was able to hire top talent (before its massive valuation increase) in 2007, including some top engineers from Google. Former Googler Justin Rosenstein called Facebook “the Google of yesterday, the Microsoft of long ago,” adding, “I have drunk from the Kool-aid, and it is delicious.” Benjamin Ling, a former Director of Product Management at Google, left for Facebook in October.

10. Facebook courts businesses with Pages and Social Ads

In an attempt to monetize its “social graph” more effectively, Facebook allowed businesses to create a presence inside Facebook for the first time (except for expensive sponsorships) in November with the launch of Pages. At the same time, Facebook launched Pages, a souped-up version of its old Flyers program, which together offer advertisers unprecedented levels of targeting and analytics inside a social network.