Tuesday, March 9, 2010

Stories from Facebook's Sordid Past

Well, the Oscars on Sunday were seen by an estimated 41.3 million people, according to preliminary Nieslen ratings, an admittedly flawed system. Slipping under the radar was a bit of news that could potentially have a negative financial impact for close to 13.9 million people: The courts have ruled that the DVR systems manufactured by satellite-TV provider Dish Network infringe on patents held by TiVo. Not only would Dish have to pay TiVo over $620 million in damages, they'd also have to fork over a licensing fee to continue using those DVRs. Where's this $620 million going to come from? Not from the executives' paychecks, but from the pockets of the 13.9 Dish Network subscribers.

In other news, TiVo stock jumped 62% on Thursday.

So one company had to pay gobs of cash to a rival company after "developing" a product that took a little bit too much from some ideas that were patented by the rival. This is a story about a legitimate legal disagreement between two publicly traded companies - both of which take great pains to protect their assets and both of which employ very astute (and probably very highly paid) teams of attorneys.

There's another, rather similar story rattling around the internet about a legal disagreement between three former Harvard undergrads who developed an interesting idea for a website and the enterprising hustler who allegedly stole it from them and turned it into a multimillion-dollar enterprise.

Hear more about the ongoing legal battles between Facebook and ConnectU after the jump.

This story broke in a great three-part expose on the founding of Facebook from BusinessInsider.com. I linked to the first part above, and I'll link to the other two parts below. I heartily encourage you to read the whole article, or at least the first part, if you get a chance. It's a nasty tale of deception, intrigue, and website programming. In fact, a major studio is currently in post-production on a film based on the story. I'm sure everyone involved is hoping that the entire litigation process will be visible in the rear-view mirror by the film's October 15, 2010 release date.

For those of you on a tight schedule, I'll give you the nitty-gritty version: In 2004, three Harvard seniors (brothers Cameron and Tyler Winklevoss, and Divya Narendra) approached a Harvard sophomore (Mark E. Zuckerberg) regarding an idea for a web project - a social networking website called Harvard Connection. The three ambitious entrepreneurs would retain legal and creative control of the site, while Zuckerberg would write the code and develop it from a technical/professional side. This plan did not work out, as Zuckerberg first delayed production of the original site, then launched his own rival site, thefacebook.com.

The Harvard Connection team rebranded their project ConnectU and filed a suit against Zuckerberg for breach of contract. Since then, a judge has ruled against ConnectU on the grounds that "dorm room chit-chat does not make a contract." However, another judge ruled against Facebook's move to dismiss the charges, and a settlement was announced (but not finalized).

Some fine investigative reporting from Business Insider has revealed that, yes indeed, Mark Zuckerberg knew exactly to what degree he stole from and screwed over his collaborators in this whole affair. While this new information has no bearing on the ongoing legal battles, it does expose Zuckerberg as somewhat of a raging dick.

The other two articles in the series - about how Zuck hacked into various people's private email accounts and ConnectU pages, respectively - solidify our hero as a peculiarly tech-savvy and immoral raging dick.

Cue the outrage, am I right? Don't get me wrong, it's an outrageous story. But I personally have no problem with some whiny, pimply-faced, jerk-off manipulating the people he said he would help, betraying their trust, and getting rich in the process. And considering he did all this while avoiding any serious (read: convictable) legal trouble one could even go so far as to congratulate him on his business acumen; as was the case when PayPal CEO Peter Thiell made a very generous $500,000 investment in Facebook in 2004. And, honestly, even if I did have some kind of problem with Zuckerberg's actions, I wouldn't say it, because I wouldn't want to get on the bad side of such a powerful, crafty, vindictive guy.

Would I personally engage in this type of behavior, or encourage someone else to behave this way? No, probably not. Mistreating the people who placed their trust in me would likely make me feel too bad to offset any personal gain. Call it a moral compass, call it fear of getting caught - I don't know the motives, or particularly care. But there are some people out there who don't share my views, and these are the kinds of people who will inevitably make the big bucks.

Perhaps more damning than the backstabbing and deceit are the email-hacking shenanigans that nowadays would be classified as shameless identify theft. Apparently he checked failed login attempts, saved on Facebook's servers, and used the passwords he found to access the private email accounts of two members of Harvard's campus newspaper on the eve of this particularly unflattering article. He also hacked into the ConnectU pages of numerous individuals using unknown methods.

Now, I know what you're thinking: I'm a member of Facebook. Should I be worried that its founder and CEO could potentially gain access to my personal information, since he has done so to other people in the past? Probably not. Not anymore, at least. Facebook is legitimate enough that there are numerous laws and "privacy policies" in place preventing anyone questionable from having access to sensitive information. Plus Facebook is a big enough enterprise that they're better off protecting the best interests of their clients rather than stealing from them. I have to admit, though, that I immediately changed both my Facebook and my email passwords after reading these articles, just to be safe.

But before we ring up Mark Zuckerberg on charges of e-crime, let's look at how he actually applied his hacker knowledge. In addition to deactivating various ConnectU accounts, he made a fake page making fun of "disgruntled litigant" Cameron Winklevoss, listing his height as 7'4", his hair color as Aryan Blond, and his language as WASP-y. He didn't access bank accounts, steal social security numbers, or even screw with email accounts. He was just lashing out - in a decidedly immature and juvenile way - against someone he felt "intimidated" by.

When we closely examine the lives of people who have done great things (and I do consider the transformation of Facebook "from a college website into a global service playing an important role in the lives of 400 million people" a pretty great accomplishment), the picture is rarely a flattering one. Nevertheless, such examinations are important, as they often shed new light on some things that play a big part in our lives, and subsequently force us to reexamine how big a part that thing should play.

...Or at least it has for me.