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This Company Sued Mark Zuckerberg For Stealing Their Idea And Won

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Facebook took the internet by storm as soon as it went public in the year 2004. Above all, Mark Zuckerberg became an overnight internet sensation. However, this social networking company has a mysterious backstory behind its invention. Just six days after the website went live, 3 Harvard seniors accused Mark of stealing their idea. In another 9 months of time, they would go on to file a lawsuit against Facebook. To understand this dispute it is important to know the timeline and exact time at which Facebook went live. This would tell us whether Mark stole the idea or not!

Winklevoss twins

The Winklevoss twins are the key players in this dispute. It was their company that went head-to-head against Mark’s Facebook. Needless to say, they had enough wealth and power going into this dispute. Both of them are former Olympians and highly praised internet entrepreneurs. They met Mark Zuckerberg of Facebook while pursuing their education from Harvard University. The twins wanted Mark to finish the final touches of their social media platform. Later on, it was found that Mark replicated the source code of this platform for his Facebook. Since then, the Winklevoss twins have revolted against Facebook and Mark.

HarvardConnection (later rebranded to ConnectU)

Two years before Facebook came into existence, it was ConnectU that promised the ambitious idea of a social networking platform. Formerly known as HarvardConnection, it was founded by the twins along with their friend Divya Narendra. They began their work in 2002. Although they were having difficulties in setting the site up themselves, they sought assistance from programmers at Harvard. In 2003 they had one of their friends work on building the backend. However, he left the work halfway after getting an offer from Google. Ambiguous as to what to do next, the twins approached many other programmers within the university. That’s when they met Victor Gao. After coming to terms for a pro-rata payout instead of becoming a full-time partner, Gao started coding the remaining part of the website. However, after a few months, he pulled out due to personal obligations.

FaceMash

While the Winklevosses’ HarvardConnection came to a halt, Mark was working on a pet project. Being a sophomore student at Harvard, Mark wanted a website that could replicate the “hot or not” game. He coded the entire website by himself overnight. The website allowed visitors to compare two female student pictures side by side and let them decide who was more attractive. In a way, FaceMash was Mark’s first breakthrough as a software developer. The website attracted 450 visitors in the first 4 hours. However, Mark was forced to shut down the website following the charges pressed against him by the college administration. He was charged with breach of security, violating copyrights, and violating individual privacy. Although his charges were later on dropped, he had to face expulsion.

Mark Zuckerberg’s stint with ConnectU

Even though Gao pulled out of HarvardConnection early, he referred Mark to the twins. This was after his FaceMash success, that became a hot topic all across Harvard. It seems as if the twins, too, were wooed by Mark’s job on FaceMash. Without further delay, the twins asked Divya to send an email to Mark.

“We’re very deep into developing a site which we would like you to be a part of and … which we know will make some waves on campus.”-Divya’s email

By now, HarvardConnection was almost complete. The previous programmers had already developed the front-end pages, the registration system, a database, back-end coding as well as the “handshake” algorithm. “Handshake” algorithm is the heart of Facebook. It is a way users could connect with each other.

Mark first met the twins in a dining hall wherein they talked about the future of HarvardConnection. Above all, they came to an oral contract to become a partner. Mark was asked to keep this project secretive as the twins wanted to be the first one to release a platform of this kind. Three months before Facebook’s release, Mark was given the credentials to work on HarvardConnection.

Although he started strong and built registration pages in about 3-4 days, his interest took a dip in the month of December. He would not attend the calls instead send an email like. “Sorry I was unreachable tonight. I just got about three of your missed calls. I was working on a problem set” However, going into 2004, Mark had promised the twins to roll out the website soon.

The Facebook

Despite promising to roll out HarvardConnection, Mark registered a new domain in the name of “thefacebook.com”. This was 2 days before his scheduled meet with the twins. On 14 January, days before The Facebook went live, Mark promised to continue his work on HarvardConnection. He remained silent about Facebook. On February 4 2004, he released Facebook to Harvard students. However, the twins were unaware of it until they saw a feature on Harvard’s student newspaper.

ConnectU’s 2004 lawsuit

Upon hearing the news of Facebook, the twins consulted with Gao to check on Mark’s progress. It turns out, Mark did nothing functional for HarvardConnection. The registration page did not connect with the back-end connections. After realising the similarities of Facebook and HarvardConnection, the twins filed a lawsuit against Facebook. The lawsuit alleged that Mark had breached an oral contract to develop ConnectU(formerly HarvardConnection) and used their source code and idea to create TheFacebook.com.

The $65 million settlement

Although the lawsuit was filed in the year 2004, the twins only agreed to a settlement in 2008. On a deal worth $65 million, Facebook would acquire ConnectU to put an end to this dispute. This proposed $65 million deal includes $20 million in cash and $1.2 Million in shares(valued at $45 million in 2008). However, in 2010, it was brought to light that the settlement value was actually $120 Million. If this difference is considered for adjusting the settlement, the value would reach as much as $466 million. However, in 2011 the judge closed the case. The judge claimed that the twins were seeking ”to gain through litigation what they were unable to achieve in the marketplace.”

Winklevoss twins are billionaires

The ConnectU couldn’t stand Facebook’s competition since it could only attract less than 1,00,000 users compared to Facebook’s billions. Despite this, the Winklevoss twins are billionaires. They are venture capitalists who led the seed-funding round for BitInstant. BitInstant is a Bitcoin payment processor. In 2013, the twins claimed that they own 1% of all Bitcoins at that time. As of now, the twins have Bitcoin holdings worth more than $1 Billion.

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