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SAN JOSE, Calif.
— For
Facebook
, 2009 was a year of extraordinary growth in which it
transformed from a fad to a phenomenon that now reaches
more than 350 million users globally and surpassed
dot-com pioneer
AOL
in popularity within
the United States
.
But as
the social networking giant gears up for more expansion
in 2010 — the latest sign being a deal to nearly
triple its office space in
Palo Alto
— the prodigal startup is also facing greater
scrutiny, including a complaint filed with the
Federal Trade Commission
over its privacy policies.
Such
controversies may be a chronic conundrum for
Facebook
, said
Jeremiah Owyang
, a Web consultant with
Altimeter Group
. To maximize its business potential, he said,
Facebook
needs to encourage users to make more information
available to advertisers. But its popularity is based in
part on the expectation of users that they will control
their data.
"
Facebook
is now a heavyweight," said Owyang, suggesting that
it has "moved up in weight class" to compete
with the likes of
Google
,
Microsoft
,
Yahoo
and
AOL
. Its reach spans more than the facebook.com site
familiar to users, where they can keep up with the
doings of friends and family, and now encompasses
thousands of other Web sites that use its Facebook
Connect function and the communication features it
offers.
For it to
seriously challenge
Google
and other established Web giants in the business realm,
analysts say,
Facebook
still needs to build out its advertising potential and
develop other revenue streams beyond the sale of virtual
goods.
In the
meantime,
Facebook
is planning for dramatic expansion in 2010. Only seven
months after it consolidated operations in a
150,000-square-foot headquarters in
Stanford Research Park
,
Facebook
recently leased 265,000 square feet of office space
nearby, formerly occupied by
Beckman Coulter
, a medical diagnostics company.
And
Mark Zuckerberg
,
Facebook's
founder and CEO, recently said he anticipated the
company's payroll, now exceeding 1,000 globally, would
grow by 50 percent in 2010. The expansion in work force
is expected to be gradual, with
Facebook
moving some operations into new offices in the first
part of the year, said spokesman
Larry Yu
.
But the
growth will not be without challenges. Over the years,
the company has faced criticism over changes that, some
users say, compromise privacy. The latest came in a
complaint filed by the
Electronic Privacy Information Center
after
Facebook
required users to adapt new privacy protocols.
"We've
had a tremendous response. Tech bloggers and security
experts think we're on to something important,"
said
Marc Rotenberg
, executive director of EPIC.
The EPIC
complaint, signed by nine other privacy and
consumer-protection organizations, was triggered by
changes
Facebook
instituted
Nov. 19
and
Dec. 9
that required users to use a "transition tool"
that included a review of their privacy settings.
While
Facebook
portrayed it as a benign process that served to empower
users, several technology experts complained. "I
felt that
Facebook
was trying to trick me into loosening controls on my
information," wrote
Princeton
professor
Ed Felten
, a security specialist. The EPIC complaint is seeking
to require
Facebook
to restore privacy safeguards.
Despite
the complaints, the company's business has shown no
signs of slowing down.
Facebook's
recent adoption of a dual-class stock structure, which
would protect the voting power of current investors, has
also stoked speculation that it could pursue a
Wall Street
initial public offering of stock next year. But
Facebook
itself has sought to discourage speculation, and one of
its investors,
Digital Sky Technologies
, has been buying privately held shares from employees
at valuations that may discourage internal pressures for
an IPO. Those deals, according to recent reports, put
Facebook's
value at
$11 billion
.
Still, an
IPO next year is a possibility. "There is a cohort
of technology companies that could likely go public in
2010, if they want to, and
Facebook
is near the top of the list," said
Paul Kedrosky
, a venture capitalist.
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