"You don’t get to 500 million friends without making a few enemies." The tagline for the movie The Social Network, based on Facebook's creation, rings true to this day.
And you don’t get there without a little bit of help, either.
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Facebook's 10th anniversary arrives as the company rides high, with a $128 billion market capitalization. The valuation makes it one of the largest media companies in the world, comparable to other media giants, like Comcast and The Walt Disney Company.
The site’s rapid growth in membership and complexity mirrors its internal growth, to a mature company of nearly 5,800 employees.
A company can grow in a number of ways. It can build from within to capture greater share of its market and slowly expand into new industries. It can also buy other companies to expand its business.
A third, slightly more offbeat method: "acquihires." When a company purchases another with the intent to gain talented people, those subsequent hires are acquihires. In addition to actual on-boarding, though, talent retention is a crucial part of the process, especially in the tech industry.
"In general, most deals don't deliver value, and one of the top reasons is that the best talent doesn't stay," says Travis Pearson, Bain & Co partner and head of the consultancy's technology practice in the Americas. "With tech in particular, there's such an emphasis on finding talent, sometimes at the executive level or frequently at the developer or engineer level."
This is the strategy that Facebook used to help grow from a site of basic profiles and messaging to a media giant. But with that evolution, it's also changed its acquisition strategy — Facebook now pursues larger, more strategic acquisitions that will add immediate value, as opposed to talented individuals.
Mashable spoke with a few of the talented engineers that came to Facebook through acquisitions. They paint similar pictures of a company driven by its founder Mark Zuckerberg, from its early days as a programmer-friendly startup to the top of the social media ecosystem.
Joe Hewitt and Blake Ross cofounded Parakey, a program that sought to simplify the user experience, with a particular focus on the split between desktop and web computing. Hewitt and Ross boasted impressive resumes before starting Parakey. They worked on popular web browser Firefox together, which Ross co-created with Dave Hyatt. Hewitt was already a veteran of web development, including user interface programming for Netscape and AOL.
Things were going well. Parakey had raised seed funding from Sequoia Capital, one of the most respected venture capital firms in California’s tech scene.
Then Ross met Mark Zuckerberg. The wheels set in motion.
"Blake and Mark Zuckerberg had met at some event and started hanging out," Hewitt says. "We had just raised our first round of venture funding just before. We were in a good position. We didn’t really want to be acquired. We were just really starting to build our startup."
By 2007, Facebook had 41 million users and was named the "it" business of the year by Fast Company. Zuckerberg’s profile as programmer/CEO was rising, but Facebook had yet to make any acquisitions.
Hewitt did not realize he and Ross were to become Zuckerberg's first talent acquisitions at Facebook.
"There was really not a lot of precedent for the acquihire thing, so we didn’t really understand why they wanted to hire us," he says. "I think they didn’t want to tell us the truth: that they didn't really care about what we were building at Parakey, that they wanted us to work on what they were building."
Being the first major acquisition, Hewitt dealt closely with Zuckerberg but still had little idea what was in store. The amount paid for Parakey is still unknown; it was not disclosed in Facebook’s S-1.
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Hewitt ended up helping create the most downloaded iPhone app to date: the Facebook app. Hewitt stepped down from Facebook in 2011, reportedly on good terms.
"We were their first acquisition so I think for everyone else there at the company, in addition to us, weren't sure how to proceed in the beginning," he says. "They just kind of gave us a desk and told us find something to do.
"We were there for quite a few months — maybe three or four — before Mark told us what he really wanted us to do, which was to lead a major redesign of the site."
Joe Hewitt, who worked on Firefox and cofounded Parakey, joined Facebook as one of the company's first acquihires.
Facebook's former chief technology officer, Bret Taylor, explains some details of Facebook's new application Open Graph during a keynote at the Facebook f8 Developer Conference, at the San Francisco Design Center in San Francisco Sept. 22, 2011 in California.
Gokul Rajaram, center, speaks onstage at TechCrunch Disrupt NY 2013, at The Manhattan Center on April 30, 2013 in New York City. He served as Facebook's product director of ads before moving to Square.
Justin Shaffer, pictured here speaking during the entrepreneur panel at Big Omaha 2010, joined Facebook and worked on video ads.
Sam Lessin, pictured here in June 2009, joined Facebook after Drop.io was bought. He currently works as direct of product management for the identity product group.
Bret Taylor, co-creator of Google Maps, and Paul Bucheit, lead developer of Gmail and the man who famously coined Google’s "Don’t be evil" motto, started FriendFeed in 2007.
It was a promising company helmed by talented engineers. Unfortunately for Taylor and the rest of the FriendFeed team, they just couldn't compete with another social startup: Twitter.
"At the time, I think it was really clear to the other cofounders and I that Twitter had beaten us in acquiring more engagement and users than we had," Taylor says.
Facebook first approached FriendFeed in an informal but memorable way. Taylor attended a dinner hosted by friend David Goldberg and his wife Sheryl Sandberg, the chief operating officer at Facebook.
Sandberg cornered Taylor and said Facebook was interested in acquiring FriendFeed.
Maybe the users weren’t quite there, but FriendFeed had created enough of a buzz around its product to attract four acquisition offers, none of which they had seriously considered.
Facebook was among them, having shown a predilection for rolling out features similar to FriendFeed, including the now famous "like" button. Facebook had "borrowed" a number of FriendFeed innovations.
But Facebook’s offer was the lowest of the four, which made Taylor regard it as an offhand suitor.
"I sort of discounted [Facebook] entirely and started talking to one of the other companies," Taylor says.
That’s when Zuckerberg stepped in with a now famous move. He invited Bucheit on a walk through the woods around Facebook’s then-headquarters, near Stanford University.
After the walk, they reached a deal. The terms included more than 11 million shares of Facebook stock plus cash, for a total close to $50 million at the time. Those shares are now valued at $590 million.
Similar to Hewitt’s experience, Taylor noted that Zuckerberg was actively involved with the acquisition and integrating the new engineers. Bucheit worked at Facebook as an engineer until leaving for seed-funding firm Y Combinator in 2010. Taylor would go on to serve as Facebook’s CTO before leaving in 2012 to pursue his own venture.
"It was a really interesting experience. It's something through which I learned to respect Mark Zuckerberg," Taylor says. "When Mark sets his mind to something, he doesn’t really get down. He just sort of listened to what was wrong and fixed it. He was so directly involved, compared to these other companies."
Taylor and his colleagues at FriendFeed were far from the last acquihires. But as Facebook grew, its moves began to reflect the changing priorities of a developing company.
Sam Odio and Paul Carduner joined after their photo-sharing service Divvyshot was bought in March 2010. That August, Facebook purchased Chai Labs, a move that brought Gokul Rajaram, one of the developers of Google’s AdSense. He now leads Square’s product engineering team.
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As the company matured, the startup sensibility shifted its acquihire strategy, though. Engineers who were acquihired were brought in for more targeted projects.
The difference has its ups and downs, Odio wrote in an email:
Of course at a company Facebook’s size there’s some adjusting. There are things you can do in a small startup that just can’t happen at Facebook. That said, it's a great contrast from a startup because you have a bit more breathing room because you can focus on building a quality product and you have help from other teams in the company on a lot of the little things. Consequentially you don't have to worry about (or have to worry less about) fundraising, finding office space, hiring, press, etc.
The nature of the acquisitions had started to change. Facebook began to acquire companies to address certain needs.
App developer Snaptu was brought in to help develop a mobile platform that is now essential to Facebook's business. Mobile advertising startup Rel8tion helped build out the local ad business. And Facebook purchased ad service platform Atlas Solutions from Microsoft to help generate data about its users and their activities.
Zuckerberg and Facebook have also started to work on larger deals that have less to do with adding to Facebook’s talent pool or technology, and more to do with diversifying its revenue through separate brands.
But with bigger bids comes bigger offers, and a higher propensity for deals to fall through and make a splash in the press. Most recently that manifested in a $3 billion failed bid for messaging app Snapchat.
Back in 2009, Facebook also missed Twitter, in its first major acquisition attempt. The companies agreed on a price — $500 million — but could not come to terms on the value of Facebook’s stock.
Three years later, Facebook struck its largest deal to date: the $1 billion Instagram buy. The move marked an important moment for Facebook. Instagram was not a struggling startup with some innovative designs and talented programmers. It was one of Facebook’s biggest mobile competitors.
Taylor was still at Facebook when the company announced the acquisition. He remembers the blowback Zuckerberg received for the price tag, yet "the thing I've been really impressed with has been the Instagram acquisition. It reminded me a little bit of the YouTube acquisition. I was at Google when that happened," Taylor says. "I remember at the time all the media was like, 'This is insane.' ... I think that Mark encountered a lot of similar criticism when he bought Instagram, because of the price."
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It was not just the price that turned heads. Zuckerberg reportedly negotiated the deal without consulting Facebook’s board of directors.
"[Zuckerberg] has the boldness to make decisions that aren’t necessarily popular at the time, and that's something I really respect," Taylor says.

Facebooks Acquisitions by Size | Create infographics
For all of Facebook’s well-publicized acquisitions and failed bids, the site has made comparatively few acquisitions, compared to other tech companies.
"This company is very un-acquisitive, compared to its peers," Needham & Co. analyst Laura Martin says. "Compared to Google and compared to Yahoo, this company buys almost nothing."
The early acquihires that helped build the company internally meant Facebook does not necessarily need to pursue other companies when moving into new spaces. Instead, the company can focus on building its products from within.
Combined with its focus on the Internet — Facebook’s only hardware attempt with HTC was a flop — Facebook should continue its strategy of pursuing only particular, strategic investments.
"It's an amazing distinction, actually, that they're doing mobile themselves," Martin says. "I think they're going to keep doing what they’re doing, which is doing things and not buying things."
However, the temptation to grow through mergers and acquisitions rises as expectations for Facebook's future remain lofty. And with an overwhelming share of the social media market, that growth may have to come from elsewhere, whether via Snapchat or some other startup pioneering the next social app.
Says Pearson, "I think it's quite common for maturing tech companies to realize that one of two things is true: They've got growth expectations that exceed the natural growth rates of their market, or they have material gaps in their product roadmap. In either case the fastest solution, but not always the best one, is mergers and acquisitions."
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