Graham appreciated that Zuckerberg had been open about his dilemma. He told the young man to take the offer that made the most sense for his business. The advice chimed with Zuckerberg’s competitive instincts. “When you met Mark, that was the first thing you took away about him,” said the longtime friend who had frequented Casa Facebook. “He wasn’t someone who liked to lose.”
By the winter of 2005, Thefacebook had become one of the most talked-about companies in Silicon Valley. It wasn’t just the number of users the platform seemed to be acquiring daily; it was also its gold mine of user data. Users were volunteering personal information from the moment they signed up for an account: hometowns, phone numbers, the schools they attended and the jobs they had, their favorite music and books. No other tech company was collecting comparable data of such depth and breadth. By the end of 2004, one million college students had joined the platform.10 Even more impressive, they were logging in to Thefacebook more than four times a day, and on every campus Zuckerberg approved for the site, the majority of students signed up.
Investors saw Zuckerberg as the next founder genius, one following in the footsteps of Gates, Jobs, and Bezos. “It was an idea that just permeated the Valley at the time, and it was this sense that you could not question the founder, that they were king,” noted Kara Swisher, a journalist who watched the rise of Zuckerberg and closely followed the men who mentored him. “My impression of Zuckerberg was that he was an intellectual lightweight, and he was very easily swayed by Andreessen or Peter Thiel; he wanted to be seen as smart by them so he adopted the changes they suggested and the libertarian mindset they projected.” It didn’t hurt, Swisher added, that Zuckerberg had a restless drive that compelled him to do whatever it took to ensure his company would be successful.
He had already shown that killer instinct in locking down control of Thefacebook in the first year of its operation. At Harvard, Zuckerberg had generously handed out titles and recruited his friends for his new company; one of his classmates, Eduardo Saverin, assumed the title of cofounder in return for the modest sum he had invested in helping Thefacebook get off the ground. In July 2004, however, Zuckerberg incorporated a new company, which essentially purchased the LLC he had formed with Saverin. The arrangement allowed Zuckerberg to redistribute shares in a way that guaranteed him the majority, while sinking Saverin’s stake from roughly 30 percent to less than 10 percent. Saverin protested the decision and later sued for compensation. The board at the time, which comprised two early investors, Jim Breyer of Accel and Peter Thiel, essentially served in an advisory capacity and afforded Zuckerberg wide latitude on such decisions.11
In September 2005, the platform, which had jettisoned the definite article from its name to become just “Facebook,” began adding high school students as well as continuing to expand to more universities. From its tiny headquarters just above a Chinese restaurant on Palo Alto’s central drag, Zuckerberg rallied his employees to work ever-longer shifts to keep up with the demand. As the platform marked more than 5.5 million users at the end of the year, he began ending weekly meetings by pumping his fist in the air and yelling, “Domination!”
The investment and buyout offers kept coming in.12 Viacom, Myspace, Friendster—all made plays in the wake of the Washington Post and Accel proposals. Yahoo, which in June 2006 offered $1 billion, was the hardest to reject. Few tech start-ups as small as Facebook, and with no profits, had been offered that type of figure before. A number of employees implored Zuckerberg to take the deal. His board and other advisers told him he could walk away from Facebook with half the sum—and the stature to do anything he wanted.
The Yahoo buyout offer forced Zuckerberg to think about his long-term vision. By July, he told Thiel and Breyer that he didn’t know what he’d do with the money and that he’d probably just build another version of Facebook.13 And in truth, he’d realized the platform could be exponentially bigger. “It was the first point where we really had to look at the future,” he said. He and cofounder Dustin Moskovitz decided that they could “actually go and connect more than just the ten million people who are in schools.”14
Zuckerberg’s whole management team left in protest when he rejected the Yahoo deal. It was his lowest point as a business leader, he later recalled. It also marked a crossroads for the company. “The part that was painful wasn’t turning down the offer. It was the fact that after that, huge amounts of the company quit because they didn’t believe in what we were doing.”
And yet the move bolstered Zuckerberg’s reputation. His audacity brought new confidence in the company. He began poaching employees from Microsoft, Yahoo, and Google. “People wanted to work at Facebook. It had this aura that it was going to be a big thing,” observed an employee who was among the first fifty hires. “You knew that if you had Facebook on your résumé, it was going to look good.”
In spite of the company’s rising profile, the culture remained scrappy. Everyone crowded around the same small desks, which were often littered with the coffee cups and chocolate wrappers of the people who had worked the previous shifts. Meetings were abruptly called off if engineers failed to show finished prototypes of their ideas, despite having no managers to weigh in or offer guidance. All-night hackathons in which employees, fueled by beer and energy drinks, coded new features were common.
Zuckerberg relished the coding sessions, but he spent most of his time working on an idea that he believed would propel Facebook ahead of its competitors, one that gave him the confidence to turn down Yahoo:15 a customized central landing page. Up until this point, if users wanted to view updates from their friends, they had to click through to each user’s individual page. Facebook was like a straightforward directory then, with no connection between profiles or opportunities to communicate easily. The new feature, called “News Feed,” would draw from posts, photos, and status updates that users had already entered into their Facebook profiles and reorganize them into a unified feed—essentially, a continually refreshing stream of information.
Despite the name, Zuckerberg envisioned News Feed as blurring the definition of traditional news. While a newspaper’s editors determined the hierarchy of articles that ran on the front of a newspaper or a website’s home page, Zuckerberg imagined a personalized hierarchy of “interesting-ness” that would dictate what each user saw in their individual version of the feed.16 First and foremost, users would want to see content about themselves, so any post, photo, or mention of a user should appear at the top of the user’s News Feed. Next would be content about friends, in descending order from those with whom the user interacted the most. Content from joined pages and groups would follow.
As simple as News Feed looked in his notebooks, Zuckerberg knew it would be challenging to create. He needed someone who could help him develop an algorithm that could rank what users wanted to see. He turned to Ruchi Sanghvi, one of his earliest employees and engineers, to anchor the technical work. Overseeing the project was a group of managers Zuckerberg had recently hired, most notably Chris Cox.
Cox had been plucked from a graduate program at Stanford studying natural language processing, a field of linguistics that looked at how artificial intelligence could help computers process and analyze the way people spoke. With his buzz cut and perpetual tan, he looked like a surfer, but he sounded like a technologist. Cox was known as a top student at Stanford; his departure for a small start-up that was competing against the much larger and better-funded Myspace and Friendster confounded his professors and classmates. He had accepted the Facebook job without meeting Zuckerberg, but from the moment the two were introduced, there was a natural fit. Cox had charisma and a talent for putting his boss at ease, and he seemed to know intuitively what Zuckerberg would think about a product or design.