Judge Tells Facebook Challengers to Do More Homework

A federal judge on Wednesday gave the founders of Facebook challenger ConnectU two weeks to shore up their case against the popular social networking site, indicating he thinks the lawsuit is based on a shaky foundation.

The plaintiffs contend Mark Zuckerberg surreptitiously stole their idea for a Web site that could be used by college students to connect and interact. ConnectU, the site eventually launched by the plaintiffs, has seen much less success compared with Facebook.

More Facts Needed

Judge Douglas Woodlock instructed ConnectU’s attorneys to come back with a stronger case, saying that dorm-room talk does not constitute an agreement, according to press reports.

The actions of plaintiffs Divya Narendra and twin brothers Cameron and Tyler Winklevoss, particularly their scheduling of a press conference about the case, seemed to be an effort at media manipulation designed to prompt Facebook to settle the case to get it out of the headlines, the judge said.

Much at Stake

Even a relatively unsuccessful settlement effort could be worth big money, given the market value of Facebook, noted Enderle Group principal analyst Rob Enderle.

“The ConnectU folks appear to have the view that even a small, in terms of percentage, settlement in a property worth over a billion would still be enough for them to be rich,” Enderle told the E-Commerce Times. “In this case they didn’t provide the value that would support such a settlement, but they might be able to cloud the ownership of Facebook enough to force such a settlement if the company is in the process of being sold.”

Zuckerberg is reported to have turned down an offer of $1 billion for the site from Yahoo.

Theft or Business Savvy?

The plaintiffs insist the site idea was theirs and that, after they entrusted Zuckerberg with the design, he created his own, initially called “Thefacebook.” The judge said he wants more proof of this purportedly contractual arrangement.

The case is more a matter of one side — the ConnectU people — being less adept at bringing a good idea to fruition than the other — Zuckerberg — Enderle suspects.

“Zuckerberg was an expert was brought in on a typical charity project that he didn’t have a lot of time to work on, favoring both his studies and his own similar Facebook offering,” said Enderle. “This is the nature of collaboration … Both sides had the same opportunities to create something great. Zuckerberg succeeded, the Winklevoss brothers did not, and now they want to capitalize on Zuckerberg’s work.”

The success of Facebook, he said, might have more to do with Zuckerberg’s “successful pursuit of funding and modifications which made the product very useful” than with the original site design.

Gag Order Issued

Woodlock reportedly warned both sides to refrain from discussing the case.

The plaintiff’s lawyer, John Hornick, did not immediately return a message left at his law office, but Facebook offered a brief statement Wednesday.

“We are pleased with the outcome of the hearing today. We continue to disagree with the allegations that Mark Zuckerberg stole any ideas or code to build Facebook. We intend to honor the judge’s request not to comment further in the media and will continue to vigorously defend this case in court,” the statement said.

Heads-Up

The case should serve as a warning to people with good ideas, said Enderle.

“If you want to contain the ideas as yours, you have employment contracts, you keep the code closed and you pay the people who work for you,” he advised. “These yo-yos got Zuckerberg to help them out for free, were unhappy with what he did, and then when he — through his own work — was successful, they pop up wanting to take control of it.”