Since he started Facebook in his Harvard dorm room in 2004, each year has seemed more surreal for 23-year-old Mark Zuckerberg. In 2006 he was offered almost €700m for the social networking site by Yahoo – an incredible sum that he, even more incredibly, turned down.

In the past 12 months, Facebook (www.facebook.com) users have quadrupled to around 40 million. Employees and revenues have trebled while the site increased its ranking from 60th to seventh most visited worldwide. Oh, and Microsoft recently spent €170m buying a 1.6% stake in Facebook, which values the company at an incredible €10.6bn. Added to the mix is the ongoing legal action from brothers Cameron and Tyler Winklevoss, who accuse Zuckerberg of stealing the source code, design, and business plan for the fledgling networking site they worked on together several years ago.

Early social networking sites were all about teenagers sharing drunken party pics – they were little more than glorified internet chat rooms with a few technological whistles and bells. However, the fastest-growing age group on Facebook now is the over-35s, representing 11% of its users. The big change came in September 2006 when access to the site was extended from university students to anybody with an email address. May saw the launch of over 5,000 free, independently produced applications that run inside web browsers the same way Microsoft Word and Excel run on PCs. A typical Facebook page contains a member's personal information, photograph and an email inbox, accessible only by one's contacts.

If Zuckerberg has his way, Facebook will become your business as well as your personal address book. The site has been working on a method of organising your friends into different groups – for example, close friends, acquaintances, work friends, work colleagues and people you want to network with. Privacy settings can be changed subtly for each. You can allow work friends to see your wall and photos, but not work colleagues. The people you are trying to network with won't see any applications, just a page of relevant work details and an easy way to start a conversation. However, in the battle for business users, Facebook will be going head-to-head with several well-established rivals.