ConnectU

ConnectU Inc.
Type of business Private
Type of site
 Social network service
Founded December 2002 (2002-12)
Cambridge, Massachusetts, U.S.
Headquarters Harvard
Area served Worldwide
Founder(s) Cameron Winklevoss
Tyler Winklevoss
Divya Narendra
Products ConnectU.com, i2hub.com, Jungalu.com, StallScribbles.com, Digital Flyers, ConnectHi (theyearbook.org), ConnectGroups, The Winklevoss Chang Group Representative Program, The Rep Center, Social Butterfly
Registration Required
Launched May 21, 2004 (2004-05-21) (as HarvardConnection)
Current status Inactive

ConnectU (originally HarvardConnection[1]) was a social networking website launched on May 21, 2004,[2] that was founded by Harvard students Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra in December 2002.[3] Users could add people as friends, send them messages, and update their personal profiles to notify friends about themselves.[4] Users were placed in networks based upon the domain name associated with the email address they used for registration.[5]

History

In December 2002, Harvard students and friends Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra wanted a better way to connect with fellow students at Harvard and other universities.[6] As a result, the three conceived of a social network for Harvard students named HarvardConnection,[3] which was to expand to other schools around the country.[7][8][9] In January 2003, they enlisted the help of fellow Harvard student, programmer and friend Sanjay Mavinkurve to begin building HarvardConnection.[5] Sanjay commenced work on HarvardConnection but left the project in the spring of 2003 when he graduated and went to work for Google.[10]

After the departure of Sanjay Mavinkurve, the Winklevosses and Narendra approached Narendra’s friend, Harvard student and programmer Victor Gao to work on HarvardConnection.[5] Gao, a senior in Mather House, had opted not to become a full partner in the venture, instead agreeing to be paid in a work for hire capacity on a rolling basis.[9] He was paid $400 for his work on the website code during the second half of 2003, then excused himself thereafter due to personal obligations.[8]

Mark Zuckerberg

In November 2003, upon the referral of Victor Gao, the Winklevosses and Narendra approached Mark Zuckerberg about joining the HarvardConnection team.[11] By this point, the previous HarvardConnection programmers had already made progress on a large amount of the coding: front-end pages, the registration system, a database, back-end coding, and a way users could connect with each other, which Gao called a "handshake". In early November, Narendra emailed Zuckerberg saying, "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." Within days, Zuckerberg was talking to the HarvardConnection team and preparing to take over programming duties from Gao.[9]

On the evening of November 25, 2003,[12] the Winklevosses and Narendra met with Zuckerberg in the dining hall of Harvard's Kirkland House, where they explained to Zuckerberg the HarvardConnection website, the plan to expand to other schools after launch, the confidential nature of the project, and the importance of getting there first.[7][9] During the meeting, Zuckerberg allegedly entered into an oral contract with Narendra and the Winklevosses and became a partner in HarvardConnection.[2] He was given the private server location and password for the unfinished HarvardConnection website and code,[8] with the understanding that he would finish the programming necessary for launch.[2] Zuckerberg allegedly chose to be compensated in the form of sweat equity.[13][14]

On November 30, 2003, Zuckerberg told Cameron Winklevoss in an email that he didn't expect completion of the project to be difficult. Zuckerberg writes: "I read over all the stuff you sent and it seems like it shouldn't take too long to implement, so we can talk about that after I get all the basic functionality up tomorrow night."[11] The next day, on December 1, 2003, Zuckerberg sent another email to the HarvardConnection team. "I put together one of the two registration pages so I have everything working on my system now. I'll keep you posted as I patch stuff up and it starts to become completely functional." On December 4, 2003, Zuckerberg writes: "Sorry I was unreachable tonight. I just got about three of your missed calls. I was working on a problem set."

On December 10, 2003: "The week has been pretty busy thus far, so I haven't gotten a chance to do much work on the site or even think about it really, so I think it's probably best to postpone meeting until we have more to discuss. I'm also really busy tomorrow so I don't think I'd be able to meet then anyway." A week later: "Sorry I have not been reachable for the past few days. I've basically been in the lab the whole time working on a cs problem set which I'm still not finished with."[7] On December 17, 2003,[12] Zuckerberg met with the Winklevosses and Narendra in his dorm room, allegedly confirming his interest and assuring them that the site was almost complete. On the whiteboard in his room, Zuckerberg allegedly had scrawled multiple lines of code under the heading “Harvard Connection,” and this would be the only time they saw any of his work.[9]

On January 8, 2004, Zuckerberg emailed to say he was "completely swamped with work [that] week" but had "made some of the changes ... and they seem[ed] to be working great" on his computer. He said he could discuss the site starting the following Tuesday, on January 13, 2004.[11][15] On January 11, 2004, Zuckerberg registered the domain name thefacebook.com. On January 12, 2004, Zuckerberg e-mailed Eduardo Saverin, saying that the site thefacebook.com was almost complete and that they should discuss marketing strategies.[9] Two days later, on January 14, 2004,[12] Zuckerberg met again with the HarvardConnection team; he never mentioned registering the domain name thefacebook.com nor a competing social networking website, rather he reported progress on HarvardConnection, told them he would continue to work on it, and would email the group later in the week.[11] On February 4, 2004, Zuckerberg launched thefacebook.com, a social network for Harvard students, designed to expand to other schools around the country.[2]

On February 6, 2004, the Winklevosses and Narendra first learned of thefacebook.com while reading a press release in the Harvard student newspaper The Harvard Crimson.[9] According to Gao, who looked at the HarvardConnection code afterward, Zuckerberg had left the HarvardConnection code incomplete and non-functional, with a registration that did not connect with the back-end connections.[5] On February 10, 2004, the Winklevosses and Narendra sent Zuckerberg a cease and desist letter.[16][17] They also asked the Harvard administration to act on what they viewed as a violation of the university’s honor code and student handbook.[18] They lodged a complaint with the Harvard Administrative Board and university president Larry Summers, but both viewed the matter to be outside of the university's jurisdiction.[19] President Summers advised the HarvardConnection team to take their matter to the courts.[15]

The About section of the ConnectU website included this sentence, which was live on December 4, 2004: "We've cycled through several programmers, even one who stole our ideas to create a competing site, without informing us of his intentions."[20]

Leaked instant messages

Between November 29, 2003 and February 4, 2004, Zuckerberg exchanged a total of 52 emails with the HarvardConnection team and engaged in several in-person meetings.[15] In this period of time, Zuckerberg engaged in multiple electronic instant message communications with people outside of the HarvardConnection team. On March 5, 2010, certain electronic instant messages from Mark Zuckerberg's hard drive were leaked out into the public.[7] On September 20, 2010, Facebook confirmed the authenticity of these leaked instant messages in a New Yorker article.[21]

The Winklevoss Chang Group

A partnership allegedly formed between i2hub, a popular peer-to-peer service at the time, and ConnectU (HarvardConnection). The partnership, called The Winklevoss Chang Group, jointly advertised their properties through bus advertisements as well as public press releases. i2hub integrated its popular software with ConnectU's website, as part of the partnership. The team also jointly launched several projects and initiatives, including:[22][23]

Lawsuits

Facebook lawsuits

In 2004, ConnectU filed a lawsuit against Facebook alleging that creator Mark Zuckerberg had breached an oral contract to develop ConnectU and used their source code and idea to create TheFacebook.com.[24] The suit alleged that Zuckerberg had copied their idea[25][26] and illegally used source code intended for the website he was hired to create.[27][28][29][30] Facebook countersued in regards to Social Butterfly, a project put out by The Winklevoss Chang Group. It named among the defendants ConnectU, Cameron Winklevoss, Tyler Winklevoss, Divya Narendra, and Wayne Chang, founder of i2hub.[31] A settlement agreement for both cases was reached in February 2008, reportedly valued at $65 million. This included buying the domain name ConnectU.com and shutting it down.[32] In May 2010, it was reported that ConnectU was accusing Facebook of securities fraud on the value of the stock that was part of the settlement and wants to get the settlement undone. According to ConnectU's allegations, the value of the stock was worth $11 million instead of $45 million that Facebook presented at the time of settlement. This meant the settlement value, at the time, was $31 million, instead of the $65 million.[33][34] On August 26, 2010, The New York Times reported that Facebook shares were trading at $76 per share in the secondary market, putting the total settlement value at close to $120 million.[35][36] If the lawsuit to adjust the settlement to match the difference goes through, the value will quadruple to over $466 million.[37]

In May 2011, after the Court of Appeals found against the Winklevosses, the twins announced that they would petition the Supreme Court of the United States to hear the case. In June 2011 the Winklevosses, in a filing with the 9th U.S. Circuit Court of Appeals, said that "after careful consideration," they would not file their petition with the U.S. Supreme Court.[38] In a new filing, the Winklevoss brothers and their business partner Divya Narendra asked the judge to investigate whether Facebook "intentionally or inadvertently suppressed evidence."[39]

Quinn Emanuel lawsuits

One of ConnectU's law firms, Quinn Emanuel, disclosed the confidential settlement amount in marketing material by printing "WON $65 million settlement against Facebook".[40] Quinn Emanuel sought $13 million of the settlement as part of a contingency agreement. ConnectU fired Quinn Emanuel and sued the law firm for malpractice.[41] On August 25, 2010, an arbitration panel ruled that Quinn Emanuel "earned its full contingency fee". It also found that Quinn Emanuel committed no malpractice.[42]

The Winklevoss Chang Group lawsuit

On December 21, 2009, i2hub founder Wayne Chang and The i2hub Organization launched a lawsuit against ConnectU and its founders, Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra, seeking 50% of the settlement. The complaint says "The Winklevosses and Howard Winklevoss filed [a] patent application, U.S. Patent Application No 20060212395, on or around March 15, 2005, but did not list Chang as a co-inventor." It also states "Through this litigation, Chang asserts his ownership interest in The Winklevoss Chang Group and ConnectU, including the settlement proceeds."[23] Lee Gesmer (of prominent law firm Gesmer Updegrove, LLP) posted the detailed 33-page complaint online.[22][43]

On May 13, 2011, it was reported that Judge Peter Lauriat had made a ruling against the Winklevosses. Chang's case against them could proceed. The Winklevosses had argued that the court lacks jurisdiction because the settlement with Facebook has not been distributed and therefore Chang hasn't suffered any injury. Judge Lauriat wrote, "The flaw in this argument is that defendants appear to conflate loss of the settlement proceed with loss of rights. Chang alleges that he has received nothing in return for the substantial benefits he provided to ConnectU, including the value of his work, as well as i2hub's users and goodwill." Lauriat also wrote that, although Chang's claims to the settlement are "too speculative to confer standing, his claims with respect to an ownership in ConnectU are not. They constitute an injury separate and distinct from his possible share of the settlement proceeds. The court concludes that Chang has pled sufficient facts to confer standing with respect to his claims against the Winklevoss defendants."[44][45][46][47][48][49]

The story of the relationship between ConnectU and Facebook is depicted in The Social Network, a film directed by David Fincher and written by Aaron Sorkin, based on the book The Accidental Billionaires by Ben Mezrich.

References

  1. ↑ HarvardConnection
  2. 1 2 3 4 Bombardieri, Marcella (2004-09-17). "Online Adversaries: Rivalry between college-networking websites spawns lawsuit". The Boston Globe.
  3. 1 2 Pontin, Jason (2007-08-12). "Who owns the concept if no one signs the papers?". The New York Times.
  4. ↑ Cassidy, John (2006-05-15). "Me Media: How hanging out on the Internet became big business". The New Yorker.
  5. 1 2 3 4 McGinn, Timothy (2004-05-28). "Online facebooks duel over tangled web of authorship". The Harvard Crimson.
  6. ↑ Bourne, Claire (2004-11-23). "Web sites click on campus". USA Today.
  7. 1 2 3 4 Carlson, Nicholas (2010-03-05). "At Last--The full story of how Facebook was founded". The Business Insider.
  8. 1 2 3 ConnectU, Inc. v. Facebook, Inc. et al, Declaration of Victor Gao (Massachusetts Federal Court 2007-09-21). Text
  9. 1 2 3 4 5 6 7 O'Brien, Luke (2007-12-03). "Polking Facebook". 02138 Magazine.
  10. ↑ Richtel, Matt (2009-04-11). "Tech recruiting clashes with immigration rules". The New York Times.
  11. 1 2 3 4 "Facebook accused of stealing idea". The Daily Free Press, Boston University. 2004-09-09.
  12. 1 2 3 ConnectU, Inc. v. Facebook, Inc. et al, Complaint against all defendants, filed by Connectu, Inc. (Massachusetts Federal Court 2007-03-28). Text
  13. ↑ Macatee, Rebecca (2010-10-01). "The real Cameron Winklevoss says 'The Social Network' is 'nonfiction'". PopEater.
  14. ↑ Milcetich, Jess (2005-03-16). "Thefacebook.com faces lawsuit from rival site". The Diamondback, University of Maryland.
  15. 1 2 3 Maugeri, Alexander (2004-09-20). "TheFacebook.com faces lawsuit". The Daily Princetonian.
  16. ↑ Glenn, Malcolm (2007-07-27). "For now, Facebook foes continue fight against site". The Harvard Crimson.
  17. ↑ Stadtmiller, Mandy (2010-09-15). "Facebook's worst enemies". The New York Post.
  18. ↑ Hale, David (2004-10-06). "Facebook faces litigation over design concept". The Daily Orange.
  19. ↑ Sharif, Shirin (2004-08-05). "Harvard grads face off against thefacebook.com". The Stanford Daily.
  20. ↑ ConnectU, ConnectU (2004-12-04). "About ConnectU - Short History". ConnectU. Archived from the original on December 4, 2004.
  21. ↑ Vargas, Jose (2010-09-20). [http://www.newyorker.com/reporting/2010/09/20/100920fa_fact_vargas> "The face of facebook"]. The New Yorker.
  22. 1 2 Lee Gesmer (2010-01-18). "Chang v. Winklevoss Complaint". Commonwealth of Massachusetts.
  23. 1 2 Caroline McCarthy (2010-01-04). "Fresh legal woes for ConnectU founders". CNET News.
  24. ↑ DisputeSoft. "DisputeSoft – IT Litigation Consulting Experts -  ConnectU v. Mark Zuckerberg & The Facebook". Retrieved 11 September 2012.
  25. ↑ Michael Levenson (2008-06-27). "Facebook, ConnectU settle dispute:Case an intellectual property kerfuffle". Boston Globe.
  26. ↑ Malcom A. Glenn, "For Now, Facebook Foes Continue Fight Against Site", The Harvard Crimson, July 27, 2007
  27. ↑ O'Brien, Luke (November–December 2007). "Poking Facebook". 02138. p. 66. Archived from the original on 2008-05-14. Retrieved 2008-06-26.
  28. ↑ McGinn, Timothy J. (2004-09-13). "Lawsuit Threatens To Close Facebook". Harvard Crimson. Archived from the original on 2007-08-15. Retrieved 2008-03-08.
  29. ↑ Maugeri, Alexander (2004-09-20). "TheFacebook.com faces lawsuit". The Daily Princetonian. Retrieved 2008-03-08.
  30. ↑ Tryhorn, Chris (2007-07-25). "Facebook in court over ownership". The Guardian. Retrieved 2008-03-15.
  31. ↑ California Northern District Court (2007-03-09). "The Facebook, Inc. v. Connectu, LLC et al". Justia.
  32. ↑ Brad Stone (2008-06-28). "Judge Ends Facebook’s Feud With ConnectU". New York Times.
  33. ↑ Owen Thomas (2010-05-19). "Facebook CEO’s latest woe: accusations of securities fraud". VentureBeat.
  34. ↑ Nick Farrell (2010-05-21). "Facebook's Zuckerberg faces security fraud allegation". TechEye.
  35. ↑ "Investors Value Facebook at Up to $33.7 Billion". New York Times. August 26, 2010.
  36. ↑ Eric Eldon (February 12, 2009). "Financial wrinkle lost ConnectU some Facebook settlement dollars". VentureBeat.
  37. ↑ Owen Thomas (May 19, 2010). "venturebeat2". VentureBeat.
  38. ↑ Emil Protalinski (June 22, 2011). "Winklevoss twins finally give up fighting Facebook". ZDNet.
  39. ↑ Emil Protalinski (June 24, 2011). "False alarm: Winklevoss twins to continue fighting Facebook". ZDNet.
  40. ↑ Dan Slater (2009-02-10). "Quinn Emanuel Inadvertently Discloses Value of Facebook Settlement". Wall Street Journal.
  41. ↑ Zusha Elinson (2010-02-10). "Quinn Emanuel Brochure Spills Value of Confidential Facebook Settlement". The Recorder.
  42. ↑ Nate Raymond (2010-09-15). "Arbitrators Confirm Quinn Emanuel's Fee in Facebook Settlement". The National Law Journal.
  43. ↑ Lee Gesmer (2010-01-18). "The Road Goes on Forever, But the Lawsuits Never End: ConnectU, Facebook, Their Entourages". Mass Law Blog.
  44. ↑ Bianca Bosker (2011-05-13). "Wayne Chang's Suit Against Winklevoss Twins Can Proceed, Judge Rules". Huffington Post.
  45. ↑ Sheri Qualters (2011-05-13). "Winklevoss Twins Loses Again in Court". The National Law Journal.
  46. ↑ "Winklevoss Twins Sued For Part Of Their Facebook Fortunes". Fox News. 2011-05-13.
  47. ↑ Nick O'Neill (2011-05-13). "Developer Sues Winklevoss Twins, Everybody Cheers". AllFacebook. Archived from the original on 2012-01-08.
  48. ↑ Chloe Albanesius (2011-05-13). "Winklevoss Twins Face Lawsuit Over Facebook Funds". PC Magazine.
  49. ↑ Sophia Pearson (2011-05-13). "Winklevoss Twins Face Suit Over Failed Alliance, Judge Says". Bloomberg.
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