The Winklevosses vs. Facebook

The New York Times has a good story on the business page about the Winklevoss twins and their effort to unwind the settlement they reached with Facebook.They claimed that they were deceived about Facebook's value when they signed the deal, and they are owed more than they got.


I am of two minds about this. On the one hand, as a legal matter, it's pretty technical, and depends on who said what to whom and when. I don't think all the emails and text messages have been disclosed and heaven knows what the legal requirements would have been on disclosure at the time the settlement was being hammered out. The twins may have a point. The article states,

"Yet days before the settlement, Facebook’s board signed off on an expert’s valuation that put a price of $8.88 on its shares. Facebook did not disclose that valuation, which would have given the shares a worth of $11 million. The ConnectU founders contend that Facebook’s omission was deceptive and amounted to securities fraud."

Well, who knows. Maybe it is.

But plainly the moral question is being raised again. "The principle is that Mark stole the idea," says one of the twins. And this is where my sympathies tend to go to Mark, for the simple reason that none of these guys invented the concept of a social network or using the Web to construct one, and even if they did, that's no reason for any of them to have exclusive control over those ideas. Those ideas were in the air at the time. So soon we forget! Friendster had almost two million members by October of 2003, and all the social complexities of when to accept friend requests and when to deny them were already the stuff of social discourse (see this Crimson column from the time, "Not a Friendster of Mine," for example). People "steal" other people's ideas all the time; that's the way the process of invention and discovery proceed. The people who succeed are the people who work at implementing the ideas. Bill Gates did not invent microcomputer operating systems, or word processors, or spreadsheet software either; that doesn't make him a thief.

As it happens, I had the sense in January of 2004, before Facebook was incorporated, that Zuckerberg was going to do something in the way of a social networking site, because he put me at the center of a prototype, "Six Degrees to Harry Lewis," in which the links were between people mentioned in the same story in the Harvard Crimson. David Kirkpatrick mentions this in his book about Facebook. (Mark asked me politely--I knew him already because he took the undergraduate CS theory class from me--if I would mind if he made the site public. He wanted to put me at the center of the network because I had been mentioned in a lot of Crimson stories. My response? "Sure. Seems harmless.")

Though it viewed Harvard through a distorted lens, I actually liked The Social Network (the movie) because of the way it toyed with this business of the movement and growth and execution of ideas, and when echoing an idea constitutes theft and when it is is the ordinary commerce in the gift culture that nurtures creativity. To complicate things, the movie throws in a scene in which Zuckerberg seems to be dishonest with his business partner, misrepresenting some documents he is asking him to sign. This is designed to make the viewer skeptical about Zuckerberg's integrity, but whether not this even happened has nothing to do with whether Zuckerberg "stole" the Winklevosses' idea. I tend to think he didn't.