The facebook, Thiel investment, and name change
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Zuckerberg wrote a program called "Facemash" on October 28, 2003 while attending Harvard University as a sophomore (second year student). According to The Harvard Crimson, the site was comparable to Hot or Not and used "photos compiled from the online facebooks of nine houses, placing two next to each other at a time and asking users to choose the 'hotter' person".To accomplish this, Zuckerberg hacked into protected areas of Harvard's computer network and copied private dormitory ID images. Harvard did not have a student "face book" (a directory with photos and basic information) at the time, although individual houses had been issuing their own paper facebooks since the mid-1980s, and Harvard's longtime Freshman Yearbook was colloquially referred to as the "Freshman Facebook". Facemash attracted 450 visitors and 22,000 photo-views in its first four hours online.
The site was quickly forwarded to several campus group list-servers, but was shut down a few days later by the Harvard administration. Zuckerberg faced expulsion and was charged by the administration with breach of security, violating copyrights, and violating individual privacy. Ultimately, the charges were dropped. Zuckerberg expanded on this initial project that semester by creating a social study tool ahead of an art history final exam. He uploaded 500 Augustan images to a website, each of which was featured with a corresponding comments section. He shared the site with his classmates, and people started sharing notes.
Original layout and name of Thefacebook, 2004
The following semester, Zuckerberg began writing code for a new website in January 2004. He said that he was inspired by an editorial about the Facemash incident in The Harvard Crimson. On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com.
Six days after the site launched, Harvard seniors Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra accused Zuckerberg of intentionally misleading them into believing that he would help them build a social network called HarvardConnection.com. They claimed that he was instead using their ideas to build a competing product. The three complained to The Harvard Crimson and the newspaper began an investigation. They later filed a lawsuit against Zuckerberg, subsequently settling in 2008 for 1.2 million shares (worth $300 million at Facebook's IPO).
Membership was initially restricted to students of Harvard College; within the first month, more than half the undergraduates at Harvard were registered on the service. Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic artist), and Chris Hughes joined Zuckerberg to help promote the website. In March 2004, Facebook expanded to the universities of Columbia, Stanford, and Yale. It later opened to all Ivy League colleges, Boston University, New York University, MIT, and gradually most universities in the United States and Canada.
In mid-2004, entrepreneur Sean Parker—an informal advisor to Zuckerberg—became the company's president. In June 2004, Facebook moved its operations base to Palo Alto, California. It received its first investment later that month from PayPal co-founder Peter Thiel. In 2005, the company dropped "the" from its name after purchasing the domain name facebook.com for US$200,000. The domain facebook.com belonged to AboutFace Corporation before the purchase. This website last appeared on April 8, 2005; from April 10, 2005 to August 4, 2005, this domain gave a 403 error.
In May 2005, Accel Partners invested $12.7 million in Facebook, and Jim Breyer added $1 million of his own money. A high-school version of the site was launched in September 2005, which Zuckerberg called the next logical step. (At the time, high-school networks required an invitation to join.) Facebook also expanded membership eligibility to employees of several companies, including Apple Inc. and Microsoft.
Source : https://en.wikipedia.org/wiki/Facebook