Meta Platforms Inc.'s META flagship product, Facebook, is now 20 years old. While it is still a year away from hitting the minimum legal drinking age in the U.S., Facebook has had a huge impact on how information is consumed and connections with friends, family and other users online.
Facebook also changed the fortunes of its co-founders forever, and in particular, Mark Zuckerberg. The Meta CEO is now amongst the top five richest people in the world, with a fortune of $170 billion, according to Bloomberg Billionaires Index, increasing by over $42 billion since the beginning of 2024.
Facebook currently has 3.07 billion monthly active users. It is by far the world's largest social network, which is especially notable because it is 20 years old now.
The Facebook of today wasn't how it started out. Here's a brief walk down the memory lane.
The Harvard Social Network
Facebook, founded as "Thefacebook" in 2004, was initially a project designed to connect Harvard University students. It was subsequently expanded to other Ivy League schools and subsequently to other academic institutions in the U.S. and Canada.
Given its exploding success, though, Zuckerberg and his fellow co-founders, Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes eventually opened up the platform for everyone.
Facebook's snappy and intuitive interface, for its time, quickly gained traction since users could quickly share photos, updates and more with their friends and family.
The company eventually dropped "The" from its name and rechristened itself as just "Facebook" after acquiring the facebook.com domain name for $200,000 in 2005.
Some of Facebook's initial investors include Peter Thiel and LinkedIn CEO Reid Hoffman.
Facebook went public in 2012, eight years after its launch.
Let’s look at how Meta stock has fared since its IPO 12 years ago.
Meta launched its IPO at $38.
Its stock price today is $474.99, which is an increase of 1,150% during this period.
If you had invested $1,000 in Meta stock on May 18, 2012, today, you would have $12,425.
Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $5,624.
A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $3,828.
Controversies Galore
Facebook has been at the center of several controversies over its 20-year existence. It has been accused of violating patents to misusing data and spreading misinformation.
Amongst its biggest controversies is the Cambridge Analytica scandal. A whistleblower revelation stated that the British political consulting firm, Cambridge Analytica, harvested 50 million Facebook user profiles to target them with political advertisements.
AI-Powered Future
Zuckerberg announced a pivot in 2021, renaming the company from Facebook to Meta and launching a virtual reality world called Metaverse, with artificial intelligence (AI) playing a key role in enabling interactions amongst users.
Meta's AI push has included the launch of Llama large-language model, with a focus on adopting an open-source approach. Its AI efforts are led by Yann LeCun, also known as one of the godfathers of cutting-edge technology.
More recently, Meta announced its own AI chips to power Facebook and Instagram in a bid to cut costs as well as reduce its reliance on Nvidia Corp. NVDA.
Announcing the company's fourth-quarter earnings, Zuckerberg said the company will build the "most popular and most advanced AI products and services."
Wedbush's Dan Ives believes the "comeback kid" Zuckerberg is "just getting started" while sounding a bullish note about Meta's prospects, adding that AI will be the next growth driver for the company.
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Photo: Solen Feyissa on Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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