Facebook was sued by ConnectU’s founders in 2004 saying that founder Mark Zuckerberg actually took the idea of a social networking site from them. The lawsuit was settled this year but ConnectU claims that during the talks Facebook misrepresented its values.
This happened when Microsoft took a $240 mn stake in Facebook, which caused the sites value to increase to $15 billion, at least in papers. But Facebook was said that the site cannot be valued that much as this was based on Microsoft’s preferred stock and the business deal of Microsoft taking stakes in Facebook. As per the approved settlement was earlier this year, Facebook agreed to give the owners of ConnectU an undisclosed amount of money and Facebook stocks. All the stocks of ConnectU had be turned over to Facebook in return of this as per the agreement. ConnectU’s co-founders (Cameron and Tyler Winklevoss along with Divya Narendra) claimed that implementing the agreement now would let Facebook disrupt the appeals process. Judge James Ware of the US district court in San Jose, California ruled that before ConnectU’s appeal can be heard, the settlement made earlier this year has to go through. “The longer the court delays in enforcing the settlement between the parties, the more like the value of the consideration subject of the settlement will change,” he wrote in his judgement. “Any further delay in enforcing the settlement will create a serious risk of prejudice to Facebook, as well as to ConnectU.” He added: “This means the status quo cannot be preserved with a stay.” He originally rejected ConnectU’s claims of fraud in June prompting the appeal which he has pledged to hear. Facebook founder and ex-Harvard student Mark Zuckerberg was sued by their fellow Harvardian in 2004 accusing him of stealing their idea for the company following work he did on a dating site for them in 2003. Recent figures by Comscore show Facebook is now the world’s biggest and fastest growing social networking site with 132 million unique visitors in June.
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