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Facebook Mum on Reported Lawsuit Settlement

April 8, 2008

Facebook is touting its new “chat” feature this week, but there is one topic the Palo Alto-based Web firm prefers not to discuss: claims that founder Mark Zuckerberg absconded with the Facebook idea from former Harvard schoolmates.

Facebook, through a spokeswoman, declined to comment Monday on a New York Times report which, citing an anonymous source, said the company was “finalizing a settlement” with founders of rival ConnectU.

Meanwhile, attorneys for both Facebook and ConnectU on Monday jointly listed documents to be filed under seal by the U.S. District Court in Massachusetts.

Ten evidently sensitive documents were listed in the filing, such as “January 2004 e-mail regarding registration of the thefacebook.com website” and “e-mail from Mark Zuckerberg to Eduardo Saverin on May 7, 2004.” Zuckerberg, Saverin and three other early Facebook partners are defendants in the suit. (The lawsuit had already brought several private documents to light, including aspects of Zuckerberg’s online diary.)

Zuckerberg, 23, has been estimated to have a net worth of $1 billion based on Facebook’s extraordinary success. But some former Harvard classmates involved in other Web ventures claim he improperly appropriated their ideas in his start-up.

Three founders of ConnectU — brothers Tyler and Cameron Winklevoss, and Divya Narendra — filed suit last April accusing Zuckerberg, whom they had hired to write code for a dating site called Harvard Connection, of stealing their concept. Facebook countersued, accusing ConnectU of unfair business practices.

Another former Harvard student, while not taking legal action, has also publicly questioned Zuckerberg’s integrity. Aaron Greenspan, creator of a student-oriented Web service called houseSYSTEM, which Zuckerberg had used, had introduced a feature called “the Face Book” in September 2003, several months before Facebook launched.

For Facebook, resolving litigation could smooth the course to a initial public offering.

“Facebook can easily write a check and be done with the legal battles,” observed Nick O’Neill, keeper of the independent All Facebook blog. “Will the Winklevoss brothers get some of the highly valued Facebook stock? I don’t think we’ll ever know, but I can guarantee you that the twin brothers will walk away with smiles on their faces.”

O’Neill credits Zuckerberg and Facebook, not ConnectU, with advancing Web technology. Its latest feature, Facebook Chat, enables users to know when their fellow Facebook “friends” are online.

In this case, Facebook makes no claims of originality. As the official Facebook blog notes: “Chat is by no means a new concept, as instant messaging systems have been around for over a decade.”




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