Facebook Files For IPO: How The Company Evolved From Straus Hall To Wall Street

Long before Facebook emerged as a ubiquitous web giant, its co-founder and CEO Mark Zuckerberg wondered if his fledgling website would ever amount to anything.

"I still don't know if we have something," Zuckerberg said in 2005. "Whether we have something that will last for a really long time or is just a cool toy for people to play with now, we'll see."

After Facebook filed for an initial public offering on Wednesday, it's clear Zuckerberg requires no further reassurance: Facebook boasts 845 million users, made over $3 billion last year, and is estimated to be worth as much as $100 billion.

Though Facebook is not the first social networking site to go public, it is by far the largest. Facebook's public offering, which seeks to raise $5 billion, will be the biggest IPO by an Internet company since Google, and caps off a year of IPOs by other Silicon Valley stalwarts such as Pandora, Groupon, LinkedIn and Zynga.

The sheer size of Facebook's offering makes it a momentous event on Wall Street, where investors are salivating for a piece of the company, and its debut on the public market promises to reshape the startup landscape by infusing Silicon Valley with billions of dollars.

Yet Facebook's IPO touches not only the site's investors and employees, but also the hundreds of millions of users whose personal disclosures on Facebook have fueled the site's growth. Their engagement with the site has helped it attract billions of dollars in revenue from advertisers eager to target individuals based on intimate data about their likes and dislikes. The hours Facebook's members dedicate to the site and the personal details they divulge rank among the social network's most valuable assets, and perhaps more than any company before it, Facebook's public offering involves the public.

"As a general rule, if it's on the Internet and it's free, you're the product, the user is the product," said Max Wolff, chief economist at GreenCrest Capital, a private equity firm. "To some extent, Facebook is a user-generated product going public, so 800 million people are about to watch their intimate life go public."

Facebook's ascent over the past eight years has all the hallmarks of the typical Silicon Valley success story. It was launched in a dorm room at Harvard University's Straus Hall by a college dropout, Zuckerberg, who displayed the headstrong hubris of a Bill Gates or a Steve Jobs and resisted cashing out early (Zuckerberg turned down a $1 billion offer from Yahoo in 2006, followed by a $15 billion bid by Microsoft). And just as Google co-founders Larry Page and Sergey Brin tapped the more experienced Eric Schmidt to be the company's "adult supervision," Zuckerberg appointed former Google executive Sheryl Sandberg to be Facebook's chief operating officer and grown-up in residence -- a decision some experts say was one of the most important the company made.