The Transforming Role of Facebook

1. Introduction to Facebook

As a popular social media platform, Facebook connects people all over the world together by sharing social news. The diversified personalised setting is provided (See the video in Figure1) and vast information is available for people to get online (Tan et al., 2014). Moreover, it allows people to share their status with others, in terms of ideas, motions, thoughts, photos, and videos (Chaim, 2019). It features and strongly promotes mutual interactions and hence changes the Internet to a place where people can share information, express the self, and connect to the world.


Figure 1: Basic Tutorial for the Use of Facebook in YouTube (Video Link: )


2. Facebook’s Role in Historical Trends in Communication Media

Found by Mark Zuckerberg, Facebook starts as university social network in Harvard from February 2004 (Figure 2). The initial URL is Insisting of using transparent information and forbidding false identity, Facebook became quite popular and attracted 250,000 student users from 34 schools, and hence obtained the investment from MasterCard (Carlsson, 2010). After that, several investors and institutions have recognized Facebook’s potential, and the name was changed to with a purchase of 2 million USD (Joshua, 2019). Then, it expanded its users to US high schools in August 2015 and then to the global market (Anne, 2020). Facebook kept open to all potential user and turned into a popular social network 25,000 high schools and 2,500 universities in several countries (Anne, 2020).


Figure 2: Facebook’s Founder: Mark Zuckerberg (Carlsson, 2010)


In 2009, Facebook has accumulated 350 million users, of which 132 million users are active per month. Valued $4.1 billion in 2010, Facebook obtained the third place in US tech companies (Anne, 2020). To strengthen its top role as the social media platform, Facebook established the Seattle engineering centre to provide Internet and technology support and then built up a data centre to develop online data stream (Sraders, 2018). Moreover, it also purchased several potential competitors like Instagram and WhatsApp (Shead, 2019). However, Facebook faced ethical issues about data safety and privacy, and tried to balance them with its revenues brought by data harvesting and selling (Shead, 2019).


Figure 3: Screenshot of Facebook’s History

(Video Link:


Through its development, Facebook has changed people’s way of understanding the Internet. It powers the Internet with three crucial features, such as interactivity, self-expression, as well as the networking.

  • Using traditional Internet, people can obtain new information or search what they need. Taking a further step, Facebook enhances the interactivity feature, which leads to economic and social benefits. Facebook serves as a platform for brands to establish close relationship with their customers via mutual interactions (Figure 4), which enhances customer loyalty and profitability. Due to this interactivity, people’s perception of social engagement is improved, and their physical and health well-beings are promoted (Joshua, 2019).
  • In addition, people can express their own ideas on this social media. Promoting self-expression in different ways, such as Emojis (Figure 5), it helps develop people’s self-esteem and fulfilment and then the social wellbeing (Kim and Lee, 2011).
  • Job hunters and companies are also using Facebook for reviewing their candidates (Figure 6). It provides personalised advertisement for companies to select appropriate users (Larry, 2020). Facebook is also used to strengthen people’s awareness for a few political issues. For example, Facebook is currently used to emphasize the people’s awareness of aboriginal people as well as raise debates on hot political issues (Bronwyn & Ryan, 2018).



Figure 4: Louis Vuitton’s Use of Facebook to Interact with Customers (Weblink: )


Figure 5: The Emojis Are the Basic Tool for Self-Expression in Facebook (Weblink:

Figure 6: Use of Facebook for Selecting Employees (Larry, 2020)


3. Owners of Facebook and Business Model

Different shareholders and stakeholders own Facebook in 2011 (Figure 7). Around 30% shares are owned by Facebook staff, and around 24% are owned by Mark Zuckerberg, and 6% are owned by Dustin Moskovitz. Generally, the insiders own over 60% before Facebook goes public. After the IPO in 2012, the ownership structure is changed due to the share selling of major owners. Shown by Figure 8, top-5 owners consists of Fidelity Investment (5.18%), Vanguard (4.49%), State Street (2.94%), T. Rowe Price (2.17%), and Black Rock (2.01%). Such ownership change is good for preventing bias and maintaining the neutrality, as outsider owners’ shares are not influential (<20%, Economides, 2007).

Figure 7: Top Owners of Facebook in 2011 (Jay, 2011)

Figure 8: The Five Biggest Owner of Facebook after Its Going Public (Road, 2015)


Business model is the process of creating value that a company relies on to achieve profitability by allocating and utilising the resources (Chesbrough, 2007). Based on data-driven mode and attention economy, Facebook’s business model can better target their customers. Shown in Figure 11, the revenues are created by data selling and selecting the appropriate users for more data. Only 1.25% of its revenue is from users’ payments, but they are the major data source and undertake the final costs by paying their attention (Gupta, 2020).

Figure 9: Facebook’s Business Model (Gupta, 2020)


4. Facebook’s Impacts

Creating revenues via attention economy is one crucial transformation with economic benefits. Industry ecology is the industrial system that has interrelated connections between key stakeholders (Hoffman, 2003). Facebook’s business model can illustrate its position in industry ecology, but the external stakeholders are competitors and governments. Tying Facebook with businesses and users together, its business model provides platform services for its users as well as the marketing services for businesses. Despite partnership with other businesses, Facebook’s commercial relationship is still data selling and advertisement positions selling. It uses customer data to filter and profile customers, in which way it can enhance ads effectiveness and provide what users want. The values are created by providing best-fit personalised information. Both government and competitors are key stakeholders of Facebook. Lying as the centre of the ecology, government regulates the operation of Facebook, such as fining its invasion of data privacy and requiring data surveillance (Gold, 2019). Meanwhile, Facebook also partly push the government’s legislation on data privacy through social media. It burdens the government for data breach, but also improve the legislation for protecting public data.

Facebook leads to cultural change. It enables indigenous people to create strong cultural identity, establish the community, as well as build up family connection (Korff, 2019). In particular, Facebook is increasingly used by young indigenous people for world exploring and social connectivity (Carlson, 2017). Therefore, Facebook offers free platform for disadvantageous groups to connect to the world freely. However, the problem might be that Facebook might erose the indigenous culture of less developed places (). Since Facebook’s editors still highlight the mainstream culture in the white society, it will weaken other cultures that harm the local cultural heritage.

Before Facebook, people surf the Internet to get information or data. Based on the Internet, Facebook uses networking technologies to generate strong social value. Specifically, it enables mutual interaction on the Internet for users to exchange ideas as well as to establish communities for social supporting (Kim and Lee, 2011). When users are achieving social values as well as personal benefits on Facebook by connecting with the word, they generate data and consume advertisements by seeing them (Leighton et al., 2018). Facebook is also used by aboriginal and other minorities for idea expression and public awareness attraction (Carlson, 2017). It will make it easy for raising the representation of minor groups and thus improve social wellbeing by making the voices heard. Although providing different products or services, other high-tech companies are the competitors due to their similar business model. They are competing for the users’ attention, which speed up the technological disturbance (Sherman, 2018). Therefore, Facebook actually increasing social values for its competitors, users, and others by pushing forward the technological disruption.


5. Conclusion

To sum up, Facebook has brought about several changes. The role of Internet has been transformed to benefit mutual connection, social communities, as well as social and individual wellbeing. It leverages Internet for user data collection and establish its business of earning money from efficient advertisements. The minorities like indigenous people can build up better social group and form their cultural identity. However, the issue of data safety and privacy is introduced into people’s daily life.




Anne, S. (2020). Why are Indigenous people such avid users of social media?. The Street. Retrieved from:

Boyd, J. (2019). istory of Facebook: Facts and What’s Happening. BrandWatch. Retrieved from:

Chaim, G. (2019). What is Facebook? Just ask Mark Zuckerberg?. Retrieved from:

Chesbrough, H. (2007). Business model innovation: it’s not just about technology anymore. Strategy & Leadership35(6), 12-17.

Gupta, S.K. (2020). Facebook Business Model | How does Facebook make money? Business Strategy Hub. Retrieved from:

Economides, N. (2007). Economics of the Internet. NYU Law and Economics Research Paper, (07-07), 07-01.

Gold, H. (2019). UK lawmakers: Facebook ‘intentionally and knowingly’ violated data privacy laws. CNN. Retrieved from:

Carlsson, N. (2010). At Last — The Full Story Of How Facebook Was Founded. Tech Insider. Retrieved from:

Larry, K. (2020). How to Use Facebook Ads to Recruit Top Talent. WordStrem. Retrieved from:

Hoffman, A. J. (2003). Linking social systems analysis to the industrial ecology framework. Organization & Environment, 16(1), 66-86.

Jay, Y. (2011). Chart of the Day: Here’s Who Owns Facebook. Retrieved from:

Joshua, B. (2019). The History of Facebook: From BASIC to Global Giant. Brand Watch. Retrieved from:

Kim, J., & Lee, J. E. R. (2011). The Facebook paths to happiness: Effects of the number of Facebook friends and self-presentation on subjective well-being. CyberPsychology, behavior, and social networking, 14(6), 359-364.

Bronwyn, C. & Ryan, F. (2018). Indigenous voices are speaking loudly on social media but racism endures. The Conversation. Retrieved from:

Leighton, D. C., Legate, N., LePine, S., Anderson, S. F., & Grahe, J. (2018). Self-esteem, self-disclosure, self-expression, and connection on facebook: A collaborative replication meta-analysis.

Tan, C. H., Li, Y., Correia, P. A. P., Medina, I. G., Romo, Z. F. G., & Contreras-Espinosa, R. S. (2014). The importance of Facebook as an online social networking tool for companies. International Journal of Accounting & Information Management.

Road, M. (2015). The 5 Biggest Owners of Facebook. Retrieved from:

Shead, S. (2019). Facebook owns the four most downloaded apps of the decade. BBC News. Retrieved from:,Facebook%20CEO%20Mark%20Zuckerberg%20has.&text=%22One%20company%20owning%20four%20of,described%20as%20a%20data%20monopoly.%22

Sherman, L. (2018). Why Facebook Will Never Change Its Business Model. Forbes. Retrieved from:

Sraders, A. (2018). History of Facebook: Facts and What’s Happening in 2018. The Street. Retrieved from: