In 2004, three Harvard alums filed a lawsuit against Facebook founder Mark Zuckerberg accusing him of stealing the idea for Facebook from them. Since then, Zuckerberg has become a very, very rich man.
Rich enough, in appears, to make the lawsuit go away.
The New York Times' Bits blog says that Facebook is close to settling the lawsuit—filed by two brothers, Cameron and Tyler Winklevoss, and a colleague, Divya Narendra—that accuses Zuckerberg of stealing the source code, design and business plan for Facebook in 2003.
At the time, Zuckerberg briefly worked as a programmer for the plaintiffs' own fledgling social-networking site, now known as ConnectU.
Terms of the settlement, if indeed there is one, have not been disclosed. A Facebook spokesperson declined to comment on legal matters. Portfolio.com e-mails to Tyler Winklevoss and Divya Narendra were not immediately returned.
The lawsuit had been the source of much consternation to Facebook, because its core assertion contested Zuckerberg's claim to have founded Facebook while at Harvard.
At the time, Winklevoss described Zuckerberg's actions to Portfolio.com as "premeditated, well thought out, duplicitous and conniving."
"We were shocked and in utter disbelief," Winklevoss said, describing his reaction when Zuckerberg launched Facebook in 2004. Zuckerberg, Winklevoss said, had done so after promising to help build Harvard Connection, now known as ConnectU. "This was our idea, and Mark stole it."
Eric Goldman, director of the High Tech Law Institute at Santa Clara University, said a settlement would remove an obstacle to Facebook going public, an outcome that Zuckerberg is thought to be shooting for.
"It's fairly typical for a company to settle major litigation in anticipation of a major corporate event like an I.P.O. or an acquisition," Goldman said. "Settling the litigation reduces one of the risk factors that might depress valuation."
In the months since the lawsuit revved up, Facebook has exploded in popularity and received a $240 million investment from Microsoft, valuing the company at a cool $15 billion. Zuckerberg himself is now thought to be worth over a $1 billion, making the 23-year-old the youngest billionaire in the world.
If the settlement goes through, it would represent a softening of Facebook's position toward the suit.
Last fall, a Facebook spokesperson lashed out at the Winklevosses and Narendra, saying, "It is unfortunate but not surprising that others falsely claim credit for [Facebook] after its enormous success."
