Eight years on, more than 900 million people use Facebook and its young founder - who still wears a hoodie to work - has convinced investors that his company is the most valuable technology business ever to have offered itself to investors.

Facebook's revenue comes from advertising - and it's now worth six times as much as the world's biggest advertising business WPP.

When trading begins in New York, it's expected that the shares will rise as small investors rush to get in on the act.

The real question though is whether in a year's time Facebook will have started to deliver the huge growth in profits that shareholders will expect.

Can Facebook crack China?

Facebook: Behind the likes and pokes

Facebook feature growth timeline

Facebook's first female engineer

My frustration came to a head after I was sent £1 last week by someone using the Barclays Pingit system. Actually not just someone, but the man I consider the guru of digital money, Dave Birch, a consultant who writes about the subject and advises many of the leading players.

A few weeks earlier I'd been trying out O2's new mobile wallet, and after negotiating my way through about a dozen passwords, pet's names, best friend at school and other security paraphernalia I'd finally managed to send £1 via text message to Dave. He was now returning the favour (without interest, I may add - that's consultants for you).

Having registered once for Barclays Pingit - and then not used it - I assumed it would be easy to retrieve my £1 from Mr Birch. Not so. First I had to register my own bank account to the Pingit account to receive payments. That involved another string of passwords - and a verification code. Which would arrive from Barclays in the form of a letter to my home - how very 21st Century!

A week later, the letter arrived, and last night I excitedly punched the code into the Pingit app and waited. After about thirty seconds, the app crashed and refused to reopen, while I contemplated smashing the phone against the wall. Eventually, I did manage to get it going again and found that the £1 had made its way into my account. Exultant, I decided to send my wife £5 via the Pingit app. She is now looking daggers at me over the breakfast table and wondering why I can't simply hand her a fiver.

And here's the problem with mobile money right now. There are plenty of ways of using your phone to pay - from Pingit, to O2's mobile wallet, to the PayPal app or NFC phones where you simply swipe to pay. But right now the aggravation factor still outweighs the potential benefits.

In the developing world, it's a different story. Some recent figures showed that in Kenya, for instance, 96% of mobile phone owners use a mobile payments system - mainly MPESA which helps users transfer cash via text message. In countries where many don't have bank accounts, any complexities in using mobile money fade into insignificance besides the sheer usefulness of the service.

Here, though, the mobile money evangelists are struggling to convince consumers that their lives will be made simpler and better once they can pay by phone.

Still, I'm not easily put off. I've now got four different mobile money applications on my phone, and I'm going to see how far I can get without cash. I will report back in a week or so...

The main cause came from the company itself, which updated its advice to investors in official documents last week to include an extra risk factor:

"[I]ncreased user access to and engagement with Facebook through our mobile products, where we do not currently directly generate meaningful revenue, particularly to the extent that mobile engagement is substituted for engagement with Facebook on personal computers where we monetize usage by displaying ads and other commercial content."

In other words, the future of Facebook is on mobile phones, and we haven't the faintest idea how we make money from that. If you, like many people, spend much of your social networking time staring at a smartphone, you may have noticed something rather refreshing - a lack of advertising cluttering up the valuable real estate of the small screen.

Whatever the claims of a fast growing mobile advertising industry, it is proving hard for Facebook and other companies dependent on ad revenue to insert messages into the mobile conversation.

Mark Zuckerberg's company has responded to this threat with an extraordinary burst of activity in the run-up to the IPO (Initial Public Offering). There was the $1bn purchase of the mobile photo sharing app Instagram, the announcement that Facebook was launching an app store, and, over the weekend, news of trials of a system where users would pay a small fee to make their posts more visible to friends on the network.

But it's not clear any of this will generate a lot of revenue. Putting adverts around Instagram snaps, thereby taking screen space from your pictures, doesn't sound attractive. How Facebook will get much of a payback from an apps store if it is mainly linking to the Apple and Android stores remains to be seen. And, as for paying to make your friends listen to you, asking users to shell out for something that they have always got for free sounds like a no-no.

The other cause for concern for potential investors is the rising tide of anxiety about the implications of sharing so much of our data with the social network. With perfect timing, the Silicon Valley controversialist Andrew Keen has a new book out, Digital Vertigo, which is in essence a diatribe against the "frictionless sharing" that is at the heart of Facebook's business model. "Chillingly Orwellian" is his description of a world where our every move is tracked to generate better advertising returns.

Meanwhile there appears to be a user revolt against the broadcasting of one's media habits on Facebook, with reports that newspaper social reading apps are seeing a rapid decline in usage. Do you really want the world to know you've just read some gossipy diary item in the Guardian, or listened to a One Direction track on Spotify?

Now, Facebook is confident that these are the concerns of a tiny if vociferous minority, and that most of us want to share ever more of our lives online. But if its users become even a little more cautious about their privacy, that will be damaging to the revenue growth which is already built into a sky-high valuation.

The biggest counter-argument, the bull's case for Facebook, can be summed up in one word - Google. When the search giant floated in 2004, there was similar scepticism about its prospects, but shares priced at $85 at the launch had climbed above $600 three years on. And Facebook is a more mature business than Google was back then, with more than twice as much revenue in the year before its IPO.

Still, Google was valued at around $23bn in 2004, while Facebook is looking at a price tag four times as high. Investors who do take the plunge are betting that Facebook will enjoy the same stellar rate of growth in revenue and profits that Google has experienced over the last eight years. And here the news is not so good. The most recent quarterly figures actually showed a decline in revenue on the previous three months, blamed on seasonal factors.

In the end, though, the Facebook IPO is a bet on the shape of our digital future. If you believe in a world where billions of us share our lives online with our friends and with advertisers, then shares in the social web's dominant business may look attractive. But if you think that people are going to start rebelling against the idea that, if they're not paying, they're the product, then maybe you won't be buying a stake in Mark Zuckerberg's company.

It will look at what people are listening to via new streaming services, both subscription and advertising supported, and will use data from the likes of Spotify, Deezer, We7 and Napster. The initiative from the Official Charts Company is obviously recognition - perhaps rather belated - that streaming, rather than owning music, has become a habit for millions of the music industry's customers.

To mark this new departure, a chart of the most streamed artists of 2012 has been released. At number one is Ed Sheeran, followed by Lana Del Rey and then David Guetta. Compare and contrast with the singles and album charts - which now combine both downloads and CD sales - and you'll see some intriguing differences.

Ed Sheeran, for instance is much lower in the download charts, while the top selling album artist Adele is only number 13 in the streaming chart. Now there's one obvious reason why the most successful recording artist of recent years isn't big on the likes of Spotify - her management have opted not to licence the 21 album for streaming.

I asked a much younger colleague with more experience of the current music scene to compare the charts. "Overall," she told me, "the streaming chart is more alternative, a slightly older demographic and features more music from artists who've not released albums for a while."

But what I really want to know is some information that you can't get from the streaming chart. Such as how big the streaming business is compared to paid downloads, whether it is an industry dominated by Spotify, in the same way that Amazon dominates ebooks, and why many artists are still so unhappy with the rewards it offers.

Streaming is obviously growing fast. According to the charts company, there were 2.6 billion audio streams in the UK last year, compared with 177 million single track downloads and 26 million album downloads. Obviously the two don't compare when it comes to revenue, but we'll come to that in a minute.

Who's winning in this new industry? Well Spotify is certainly the best known brand in Europe, and perhaps now in the US. But with only 3 million paying subscribers there is obviously a huge untapped market to aim at, and the battle is far from over. France's Deezer, with 1.5 million subscribers, is growing rapidly, and the word in the industry is that it is the best placed to challenge Spotify.

For artists, though, it is still less clear what streaming has to offer. I've heard suggestions that music insiders have a ready reckoner which values every paid download track as worth 350 streams. And we've heard from plenty of disgruntled artists complaining of getting pennies for hundreds of thousand streams and from others, like Adele, who've decided to stay out of streaming for fear of cannibalising CD and download sales.

I spoke to Will Hope from Spotify, and asked him whether there were any signs that relations with artists were improving. He pointed to the fact that music from Bob Dylan and the Red Hot Chili Peppers - artists who had kept away from streaming - was now available on his service. And he insisted that the rewards for musicians were growing rapidly. "We're only just beginning, we're one of the most significant revenue providers for artists."

The arrival of a streaming chart means that a new way of getting access to music has come of age. But for now - and perhaps for years to come - most artists will dream of getting a number one album or single, not a number one stream.

Streaming top 10

Singles top 10

Albums top 10

1. Ed Sheeran

1. David Guetta

1. Adele

2. Lana Del Rey

2. Gotye

2. Lana Del Rey

3. David Guetta

3. Jessie J

3. Emeli Sande

4. Rihanna

4. Flo Rida

4. Florence & The Machine

5. Coldplay

5. Nicki Minaj

5. Ed Sheeran

6. Gotye

6. Ed Sheeran

6. Coldplay

7. Jessie J

7. Rihanna

7. Rihanna

8. Emeli Sande

8. Emeli Sande

8. David Guetta

9. Florence & The Machine

9.Rizzle Kicks

9. Whitney Houston

10. Drake

10. Katy Perry

10. Jessie J

Source: Official Charts Company Top 10 year to date

That's what I did for the launch of a book called The Cambridge Phenomenon. It's a study of the emergence in Cambridge over the last 50 years of a clutch of world class technology firms, many of them born out of a university whose scientists have been behind everything from discovering the structure of DNA to building the world's first webcam.

At a launch party in the dignified but distinctly low tech surroundings of the Senate House, the Cambridge great and good had all turned up. I spotted Herman Hauser, founder of Acorn and now godfather to many start-ups, Sir Alec Broers, the scientist who after a business career which included many years at IBM, returned to the university as a vice-chancellor determined to forge stronger links with the outside world, and Warren East, the chief executive of ARM, the chip designer which is Cambridge's biggest success story so far.

The speakers described a culture which encouraged students and academics to look outwards, and a community which supported young companies with a spirit of collaboration and advice from those who had gone before. So, for instance, ARM was born out of Acorn Computer in the 1980s, but is now itself providing help and inspiration to the next generation of start-ups.

But having heard from the Cambridge veterans, I was on the lookout for evidence that the spirit of innovation really was still alive, and that clever new companies were emerging from the university. And in the nostalgic crowd, I found two young entrepreneurs, both products of the university, and both convinced that this is the place to grow their companies.

Billy Boyle's start-up business Owlstone makes gas sensors on a microchip which can detect anything from explosive to disease. He and his co-founders took their research from a Cambridge engineering lab where they were working on a microchip design and turned it into a business.

"Right from day one we wanted to take what we had in the lab and out it out in the world," he told me. "One of the great things about starting a business here is the access to talent and the willingness of people who've done it before to help. When we started lots of people gave up time to help us."

By contrast, Emmanuel Carraud emerged not from a lab but from Cambridge's relatively new Judge Business School. His start-up, MagicSolver, enables smartphone users to discover the latest and best apps from the thousands now cluttering up the Apple and Android stores. It doesn't sound a very hi-tech business, but Emmanuel told me that Cambridge software expertise and the collaborative culture were among the many good reasons to base his firm here. "There's great talent, great advice from mentors, it's really international and there's a great vibe."

So, a few reasons why Cambridge, rather than London's Tech City, may offer the UK's best chance of generating world-class technology companies. What London does have is easier access to the venture capital firms which seem so reluctant to travel outside the capital. What it lacks is strong links with a world-class university, and a powerful network of people with a track record in both science and business, willing to pass on lessons to new companies.

But the main lesson from Cambridge is that you cannot build a technology cluster overnight. When I made a programme about the Cambridge phenomenon in the early 1990s, a number of people told me that the place still needed a few billion dollar companies to act as an inspiration for others.

Now, at the latest count, it's got nine such businesses. Twenty years from now, perhaps Tech City will be home to a similar collection of world-beaters, but first it may need to attract more scientists and fewer web designers.

I've been to several major gadget launches - the original iPhone, Sony's PlayStation 3, Microsoft's Xbox Kinect - and last night's unveiling of the Galaxy S3 smartphone in London's Earl's Court may well have been the most over the top and extravagant yet. In the cavernous halls where everyone from Pink Floyd to Madonna has strutted their stuff, thousands gathered to see a rectangular slab of plastic and metal.

Why? Because only one smartphone has challenged - perhaps surpassed - the iPhone in terms of sales, technology and consumer appeal. And the latest version will undoubtedly set the standard for Apple and the rest of the industry to try to match.

For all the extravagant talk of a device which allows you to "live the life extraordinary", the latest Galaxy looks at first sight like any other modern touchscreen phone. It does have a bigger sharper screen than its predecessor, and some clever touches. There's a voice recognition function which seemed in the demo to do everything that Apple's Siri does and more, there's eye-tracking technology which means that the phone goes to sleep when you stop looking at it, and there's NFC (Near Field Communication) built in, allowing users to simply tap each other's phones to share content.

But at its heart is the latest Ice Cream Sandwich version of the Android operating system - and that's on plenty of other impressive phones from the likes of HTC, LG and Sony. Why the new Galaxy matters is that the previous models have established it in consumer minds as the number one Android phone - and in this business, it's increasingly apparent that the winner takes all.

Look across the wider smartphone battlefield, and it seems that there could soon be just two players left standing. Last week Apple revealed that it had sold 35 million iPhones in the last quarter, a figure that left industry analysts gasping for breath. Only for them to suffer another fainting fit on learning that Samsung had sold more than 44 million smartphones in the same period. With the Korean firm's cheaper phones also roaring ahead, it has now overtaken Nokia as the world's biggest mobile maker.

But what is truly astonishing is the share of industry profits these two companies are winning. Look at this infographic of recent profit trends in mobile phones, compiled by a respected mobile industry analyst, Horace Dediu.

It shows that Apple captured 73% of phone industry profits over the last three months, with Samsung getting 26%. HTC got 1% and the rest made losses, or profits so small they barely register.

From the mobile operators' point of view this emerging duopoly must be deeply worrying. Having been forced to bend to Apple's will, they were very happy to see the emergence of Android, with its promise of a multitude of manufacturers competing for their attention. Now it looks as though Samsung is in position to call all the shots in the Android market.

What happens next? Could RIM, which has been previewing its new Blackberry 10 system this week, make a comeback in the autumn with innovative phones that revive its appeal? Will Nokia's Lumia range - apparently doing reasonably well in the United States - pull the Finnish giant out of its death spiral? Or will a Chinese giant like Huawei start flexing its muscles in Western markets?

The mobile networks will hope that all of those eventualities - however unlikely - come to pass. But in the meantime, they will all be helping Samsung with its massive marketing push behind the Galaxy S3 - and making it into an inevitable and very profitable hit.

The politician was Claire Perry MP, who has been leading the fight to get internet providers to do more to police the internet and protect children from pornography. She squared up to Nicholas Lansman of the Internet Service Providers Association - surprise, surprise, none of the big ISPs seemed keen to put their heads above the parapet.

The discussion did not really focus on the practicalities of blocking The Pirate Bay - which many in the internet industry believe will be ineffective - but on the responsibility of ISPs in general to act against any illegality online.

Mrs Perry, who wants internet users to have to opt in to access to pornography, insisted that this was not about web censorship of the kind we see in Burma or China but about giving parents the ability to protect children. Mr Lansman pointed out that his industry was giving consumers the filtering tools to block access to pornographic material, but was not keen to impose their use, or to end up policing the internet.

Now there's little doubt that Mrs Perry speaks for a wide strand of public opinion which would like to see internet firms be more proactive in child protection. The Daily Mail, with its instinct for Middle England's concerns, has given her campaign vigorous backing.

But just look at the reaction on Twitter and in emails to this morning's debate, and you will see a rather different view. Many believed the discussion showed a fundamental lack of understanding of the internet, and some that it was the job of parents, not ISPs, to block children's access to unsuitable internet sites. "You want DIY stores to be responsible for what buyers of crowbars do with them," asked one tweeter.

And as for the Pirate Bay blocking orders, there was widespread outrage online at the very idea that the music industry should act to stop consumers getting access to copyright material. "UK ISP blocking of #piratebay is the beginning of the end - equivalent to China's censorship policy. What's next?" read one message.

In summary, there is a gulf opening up between two views of the internet. On the one side, you've got those who feel strongly that there needs to be far more effective regulation, with action to block access to certain websites, and child protection trumping any concerns about censorship.

On the other, a libertarian strand online is opposed to any limits on how individuals use the internet, and views action to prevent access to copyright material or pornography as not only ineffective but morally wrong.

On some issues - notably government plans for greater web surveillance - some of the pro-regulation camp will shift to the libertarian side. But, as media firms step up their battle against piracy and popular newspapers demand action from politicians on web filtering, the internet culture wars are going to get more heated.

The answer, according to the Dutchman running Britain's biggest mobile operator, is that we're a long way behind the United States and many European countries. And he puts some of the blame on the industry's appetite for litigation.

This morning, Everything Everywhere - the bizarrely named amalgam of T-Mobile and Orange - is launching a campaign to heighten awareness of the benefits of 4G to the UK economy. It's the brainchild of Olaf Swantee who came to the UK in September to take up the reins at EE (let's call it that to save space).

When I went to see Mr Swantee in his office in Paddington, he professed himself puzzled by what he'd found on arrival in London. This country, he told me, had long had a reputation as an early adopter of mobile technology - now it was in the 4G slow lane.

The industry had underinvested in the fundamental digital infrastructure, and he intended to do something about it - first by spending £1.5bn on his own network, then by whipping up interest in the importance of 4G.

Hence the 4G Britain campaign. But what exactly is this supposed to achieve? The 4G auction has been delayed until the end of this year, so I suppose the campaign could apply some pressure to speed that up. But Ofcom says the spectrum for 4G - mostly the dividend from the digital switchover - won't be available until next year anyway, so there is no real prospect of accelerating the timetable.

And whose fault is it that things have moved so slowly? Well speak to anyone at Ofcom and they will point to the constant threat of legal action from the mobile operators. Even now, we can't be sure that the auction won't be further delayed by litigation from one network or another which doesn't like the rules of the game.

Mr Swantee seems to agree that this is a problem in the UK. "I've been surprised at how often lawyers are used to resolve problems here," he told me. "Any litigious behaviour that delays 4G further would not be good."

He said it would be very damaging if operators were tempted to sweat their existing assets - the 3G networks in which they invested a decade ago - while continuing to use their lawyers to postpone any investment in 4G.

But who started this? The courtroom battles began way back in 2008, when Ofcom's attempt to make available some of the spectrum for 4G was stymied by a legal challenge - by T-Mobile, now part of EE. Mr Swantee makes the fair point that that was under a previous management, and he has brought in a new approach.

But his rivals are cynical about the motives behind the 4G Britain campaign. They point to the fact that Everything Everywhere is currently awaiting a ruling from Ofcom on whether it can use some existing spectrum to bring in a 4G service early. There's been talk of legal action if the regulator waves that through - so no wonder Mr Swantee wants everyone to join hands and sing songs about the 4G future around the campfire.

And over the last week or so I've had a glimpse of the rivalry within the industry. The PR team preparing the 4G Britain campaign suggested that other networks, along with celebrities and various technology companies would be joining the movement. One operator got in touch to stress that they would not be signing up and a technology company told me that claims of their support were inaccurate. Even the celebrities seem to have thought twice about it.

Mr Swantee certainly makes a convincing case on the need to get on with building a 4G Britain. But in a mobile market which is one of the most competitive in the world, it may be a little optimistic to expect peace to break out and lawyers to be put out of work.

Even now, we can't be sure that the auction won't be further delayed by litigation from one network or another which doesn't like the rules of the game.

Britain’s 4G delays - blame the lawyers

When the Digital Economy Act was rushed through Parliament in the dying days of the Labour government, it appeared to be a great victory for the media industries.

But the ISPs fought back, and although their legal challenges largely failed, they resulted in this long delay in implementing the law.

Four years is a very long time in the fast-changing world of digital content. By the time the process of sending letters to suspected illegal file-sharers begins in 2014, the whole landscape may have been transformed.

The media firms may then find the Act is not as powerful a weapon against piracy as they had hoped.