The night-walkers of Uganda

The rise to success
“I’ve added you as a friend on Facebook...” This 
introduction to the web’s fastest growing social 
phenomenon is appearing in email inboxes 
across the world. Facebook started as a way for 
American college friends to stay in touch and 
has now become one of the Internet’s hottest 
websites. 
Facebook, which was created by Harvard drop-
out Mark Zuckerberg three years ago, is currently 
challenging MySpace, the world’s most popular 
social networking site. This may explain why 
MySpace’s owner, Rupert Murdoch’s News Corp, 
is thinking about exchanging MySpace for a 25% 
stake in the search engine, Yahoo! 
Last year, Yahoo! tried to buy Facebook. Mr 
Zuckerberg rejected Yahoo!’s first offer of 
$1bn and so Yahoo! raised it to $1.6bn – but 
Zuckerberg still didn’t want to sell. At the time, 
many Internet watchers laughed at Zuckerberg 
for not accepting Yahoo!’s offer, but today 
analysts think that Facebook could be worth 
several times what Yahoo! initially offered. 
In the UK, in May last year, Facebook was the 
469th most popular website – a year later, it 
is the 18th. According to an Internet statistics 
company, Hitwise, half the people who visit the 
site are between 18-24 years old, but the real 
growth over the past six months has come from 
24-35 year olds. The site has reached what 
sociologists call a ‘tipping point’, with the name 
entering into many people’s vocabulary. 
Network effect 
The rapid growth in Facebook is due to Mr 
Zuckerberg’s decision to open the network to 
everybody. Zuckerberg created Facebook while 
he was at Harvard, and up until last autumn, 
people could only join the site if they had an 
academic email address. Then in September the 
company decided to let anyone join. 
“The growth started slowly in late September, 
early October last year and has really taken 
off since then,” says Heather Hopkins, vice 
president of research at Hitwise UK. It is adding 
more than 100,000 users a day and already has 
27 million active users. More than half of the 
users visit the site every day. MySpace is still 
much larger, it has 60 million users in the US 
alone, but Facebook is catching up. 
News Corp is watching Facebook’s success. A 
reporter recently asked Mr Murdoch why he had 
not made an offer for another North American 
newspaper group, Tribune, Mr Murdoch said 
it was because people no longer want to read 
newspapers. “That’s because everyone’s going 
to MySpace,” joked the reporter. “I wish they 
were. They’re all going to Facebook,” the media 
mogul replied. 
Investors were surprised when Mr Murdoch 
bought MySpace in 2005 for $580m (£290m). 
But in August 2006, Mr Murdoch made a $900m 
deal with Google to provide adverts for MySpace. 
That deal has had positive and negative 
effects. The MySpace site is now cluttered with 
advertising. 
Online ad boom 
Mr Murdoch’s deal with MySpace and Google 
gave him a way into the world of online search 
advertising, which is by far the largest part of the 
booming online ad market. But it was only a foot 
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