Facebook is a website (referred to as a "social utility") that connects people with friends and others who work, study, and live around them. People use Facebook to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet. It is considered a social networking site because people it contains profiles, semi-persistent public commentary on the profile, and a traversable publicly articulated social network displayed in relation to the profile (which basically means you can view information about a person, make comments to them, and see who their friends are).
Founded in February 2004 by Mark Zuckerberg and co-founders Dustin Moskovitz and Chris Hughes from their Harvard dorm room, it moved its base of operations to Silicon Valley 4 months later and by December of the same year, had 1 million users.
Zuckerberg admits to being a hacker--but only if he's sure you understand that the word means something different to him. To him, hacker culture is about using shared effort and knowledge to make something bigger, better, and faster than an individual can do alone. "There's an intense focus on openness, sharing information, as both an ideal and a practical strategy to get things done," he explains. He has even instituted what he calls "hackathons" at Facebook--what others might call brainstorming sessions for engineers.
Hacker culture may have become more mainstream but in the age of cyberbullying and cyberfraud, hacking can still be very damaging. Read a MySpace example on cyberbullying and a Facebook example on cyberfraud and remember: DBEYR while you're online.
Historical perspective: In August 2011, Facebook hit 1,000,000,000,000 page views. That's one trillion.