Wednesday, August 20, 2008

Facebook to Buy ConnectU

The BBC has reported that Facebook have set ConnectU as an acquisition target. More interesting perhaps, is the fact that ConnectU previously sued Facebook CEO Mark Zuckerberg for stealing its code.

Basically, prior to becoming the face of Facebook, Zuckerberg worked as a programmer for the founders of ConnectU. Later, in 2004, he launched Facebook as an Ivy university-only network, which kickstarted the lawsuit by his former employers. The case was based on the accusation that Zuckerberg had stolen their code. At the time they asserted that Facebook should be shut down and all profits transfered to ConnectU. The suit was settled in 2008, but an appeal was later lodged by ConnectU under claims that Facebook had misrepresented it's real value.

Facebook lead ConnectU to believe its actual value was approx. $3-4 billion, when in reality it has a filed value of $15 billion. Based on the former figure, Facebook gave the ConnectU owners an undisclosed sum of money and stock. However, in return ConnectU's principal shareholders agreed to sell their ConnectU stock to Facebook.

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