A man claiming 84 percent ownership of Facebook has filed an amended complaint that contains what he says are emails from Facebook chief Mark Zuckerberg, admitting to the ownership deal.
The emails actually read like a deleted scene from “The Social Network.” According to the messages presented by Paul Ceglia, Zuckerberg successfully secured funds from Ceglia for what was then known as “The Facebook,” but then argued that Ceglia should have a lower ownership stake in the company because Zuckerberg had done all the work. Ceglia agreed, but Zuckerberg then told him that the site was not really going anywhere and offered to refund Ceglia’s money and just call the whole thing off. Meanwhile, Facebook had become wildly popular at Harvard and Zuckerberg had secure venture capital funding for the project, something Ceglia said Zuckerberg never disclosed.
Not surprisingly, the emails between the two men devolved into Ceglia threatening to call Zuckerberg’s parents and Zuckerberg insisting that he should be paid even more for his efforts.
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Facebook lawyer Orin Snyder, meanwhile, said “this is a fraudulent lawsuit brought by a convicted felon, and we look forward to defending it in court. From the outset, we’ve said that this scam artist’s claims are ridiculous and this newest complaint is no better.”
Who is Paul Ceglia? In 2003, he hired Zuckerberg to do coding work for a company called StreetFax. Ceglia said Zuckerberg then persuaded Ceglia to invest in Facebook—$1,000 for a 50 percent stake in the company, plus an extra 1 percent stake for every day Facebook was not online past January 1, 2004.
Ceglia’s filing includes a July 2003 email from Zuckerberg in which Zuckerberg asks Ceglia for permission to use StreetFax source code for Facebook’s search engine. A followup email also proposed charging alumni $29.95 per month to use the site. Ceglia responded that it will probably be hard to get people to sign up and suggests they “make it free until it was popular and then start charging.” In the meantime, Ceglia suggested setting up a licensing agreement with Harvard to school items like sweatshirts and mugs.
Ceglia handed over an additional $1,000 in November 2003 and days later Zuckerberg sent him an email labeled “urgent” that discussed the need to move on “The Facebook” immediately.
“I have recently met with a couple of upperclassmen here at Harvard that are planning to launch a site very similar to ours. If we don’t make a move soon, I think we will lose the advantage we would have if we release before them,” Zuckerberg wrote. “I’ve stalled them for the time being and with a break if you could send another $1000 for the facebook (sic) project it would allow me to pay my roommate or Jeff to help integrate the search code and get the site live before them.”
Those upperclassmen are no doubt the Winkelvoss twins, who secured a $65 million settlement from Facebook in 2008 after they claimed that they were the true brains behind Facebook. Just this week, a judge shut down an appeal to overturn that settlement.
Ceglia agreed, but by the New Year, the site was still offline. Zuckerberg again requested more money, but then argued that their deal for a 1 percent stake for every day past January 1 was unfair, and requested a written waiver exempting Zuckerberg from the contract.
