Mark Zuckerberg wrote a program called Facemash on October 28, 2003 while attending Harvard as a sophomore. According to The Harvard Crimson, the site was comparable to Hot or Not and "used photos compiled from the online facebooks of nine houses, placing two next to each other at a time and asking users to choose the 'hotter' person"
To accomplish this, Zuckerberg hacked into protected areas of Harvard's computer network and copied private dormitory ID images. Harvard did not have a student "Facebook" (a directory with photos and basic information) at the time, although individual houses had been issuing their own paper facebooks since the mid-1980s. Facemash attracted 450 visitors and 22,000 photo-views in its first four hours online.
The site was quickly forwarded to several campus group list-servers,[clarification needed] but was shut down a few days later by the Harvard administration. Zuckerberg faced expulsion and was charged by the administration with breach of security, violating copyrights, and violating individual privacy. Ultimately, the charges were dropped. Zuckerberg expanded on this initial project that semester by creating a social study tool ahead of an art history final. He uploaded 500 Augustan images to a website, and each image was featured with a corresponding comments section. He shared the site with his classmates and people started sharing notes.
The following semester, Zuckerberg began writing code for a new website in January 2004. He said he was inspired by an editorial about the Facemash incident in The Harvard Crimson. On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com.
Six days after the site launched, three Harvard seniors (Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra) accused Zuckerberg of intentionally misleading them into believing he would help them build a social network called HarvardConnection.com. They claimed he was instead using their ideas to build a competing product. The three complained to The Harvard Crimson and the newspaper began an investigation. They later filed a lawsuit against Zuckerberg, subsequently settling in 2008 for 1.2m in shares (worth $300m at Facebook's IPO).
Membership was initially restricted to students of Harvard College; within the first month, more than half the undergraduates at Harvard were registered on the service. In June 2004, Facebook moved its operations base to Palo Alto, California. It received its first investment later that month from PayPal co-founder Peter Thiel. In 2005, the company dropped the from its name after purchasing the domain name facebook.com for $200,000.
A high-school version of the site was launched in September 2005, which Zuckerberg called the next logical step. Facebook expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft. On September 26, 2006, Facebook was opened to everyone at least 13 years old with a valid email address.
In 2012, Facebook was valued at $104 billion, and by January of 2014 its market capitalization had risen to over $134 billion. At the end of January 2014, 1.23 billion users were active on the website every month, while on December 31, 2013, 945 million of this total were identified by the company as mobile users. The company celebrates its tenth anniversary in the week beginning February 3, 2014.
In January 2014, during the week previous to the company's tenth anniversary, chief operating officer of Facebook, Sheryl Sandberg, clarified: "He [Mark] always said Facebook was started not just to be a company, but to fulfill a vision of connecting the world."