Top 5 Myths About Facebook

We've heard our whole lives that there's no such thing as a free lunch, so it's only natural for people to suspect Facebook might start charging for its service. This rumor seems particularly plausible when you consider arguments like the one Slate magazine writer Farhad Manjoo put forth in a column from 2008. Manjoo pointed out that if even 5 percent of Facebook users agreed to pay $5 a month for the service (with the remaining users downgraded to limited accounts), Facebook could generate hundreds of millions of dollars a year in membership fees alone.

Fortunately for Facebook users, the company currently has no plans to start charging for the service. According to a Business Week interview with Facebook COO Sheryl Sandberg, Facebook is profitable and growing quickly based only on the strength of its advertising revenues. So while it's hard to look in to the future and say with certainty what Facebook's business model will look like, for the time being Facebook addicts can keep their money in their wallets when they log on. The next Facebook myth also has huge financial implications, but not for Facebook users. Read on to see why.

Mark Zuckerberg, founder and CEO of Facebook, was declared the world's youngest billionaire at age 24 by Forbes Magazine. But years before Facebook was a household name, Zuckerberg was hired to do some coding for fellow Harvard students starting a Web site called Harvard Connection. The Web site was designed to help college students network with one another, a premise remarkably similar to Facebook's. The rest of the story depends on whom you ask. The students behind Harvard Connection contend that Zuckerberg deliberately neglected his programming duties so that he could create a site with the same premise. Zuckerberg, on the other hand, claims his inspiration for Facebook stemmed from Harvard's reaction to Facemash, his previous Web site. Facemash had a very simple premise, allowing Harvard students to compare and rate pictures of each other. The instant success of the site (for the few days Harvard allowed the site to remain up, at least) gave Zuckerberg insight into the appeal of following friends and acquaintances online. From there, Zuckerberg claims that, considering the buzz around social networking at the time, the idea for Facebook was a natural extension of his previous work.

So what's the real story? After a lengthy legal battle between the founders of Harvard Connection (now called ConnectU) and Zuckerberg, the matter was ultimately settled out of court. According to a publication released from Harvard Connection's lawyers, Facebook agreed to pay up to $61 million in cash and stock to close the matter [source: Kincaid]. While that's a lot of money, it doesn't scratch the surface of what Facebook is worth today, which explains why the next myth on the list has yet to become a reality.

For most 20-somethings, a billion dollars would sound like a lot of money, but not for Facebook CEO Mark Zuckerberg. After running Facebook for two years, Zuckerberg entered into talks with Yahoo! to discuss selling the company. Facebook competitor MySpace sold for $580 million only a year earlier and had more users than Facebook at the time, so Yahoo! likely felt that offering a purported $ 1 billion for the Web site was more than generous [source: BBC]. Zuckerberg thought otherwise, opting to maintain ownership and control of the company, instead.

It turns out he made the right move; only a year later, Microsoft valued Facebook at $15 billion [source: Sloane]. Granted, Microsoft had its reasons for pinning such a hefty price tag on the Web site, essentially guaranteeing that none of its competitors could purchase Facebook as a result. Still, an early 2009 internal appraisal of Facebook's value placed the figure at closer to $4 billion, an amount still well above the $1 billion offered by Yahoo! [source: CBS News]. As for selling the company, the rumors seem to have died down for now. In a 2007 interview with Time magazine, Zuckerberg claimed that selling Facebook is "not the core focus" for the company. Instead, Zuckerberg says Facebook is busy finding the best possible way for people to connect online, which brings us to our next myth.

There's no denying that Facebook makes it easier to connect with old friends and distant relatives, but this convenience might come at a heavy cost. West London Mental Health Trust psychiatrist Himanshu Tyagi warns that because social networking makes communicating such a fast paced and dynamic experience, people might become desensitized to their real-world relationships. Younger people who've grown up with the Internet are particularly at risk, he says, since they sometimes place heavy emphasis on their virtual identities and may undervalue face-to-face interaction as a result.

Psychologist Aric Sigman goes even further, saying that because Facebook enables people to live an increasingly isolated existence, their health may suffer. Pointing to studies that illustrate how the body's genes and hormone levels react to personal interaction, Dr. Sigman contends isolation puts the body at risk for a number of ailments including heart disease, strokes and even cancer.

Fortunately for Facebook users, not everyone thinks the site is turning the world into hermits. A Cambridge University study of Facebook users found that the site can be a useful tool for maintaining relationships that might otherwise be lost. Additionally, the study's participants found Facebook useful for getting a better-rounded view of their friends and family and ultimately felt that the site gave them more options for how they interacted with others. Of course, if the next myth on our list has some truth to it, you may want to log off regardless of how the site affects your social skills.

While it's never a good idea to post pictures to Facebook unless you don't care who sees them, you probably never imagined that, even if you delete your account, Facebook could use those pictures for commercial purposes. That's the impression that recent changes to the company's Terms of Service (TOS) seemed to give, however.

The ensuing uproar over the changes prompted Facebook's founder, Mark Zuckerberg, to address the issue on the company's blog. Zuckerberg claims the changes clarified the way sites like Facebook work, pointing out that even if a user deletes his or her account, the content from that account might still exist on other users' pages. Accordingly, Facebook needs license to share those images with other members, but only in the way that users determine via their accounts' privacy settings. Most importantly, Zuckerberg insists that Facebook has no intention of selling users' pictures for any reason, though he admits that Facebook needs to work on clarifying the language to that effect.

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