Talking tech since 2003

A lawyer for Facebook said she is “unsure” whether Mark Zuckerberg signed a contract that reportedly entitles Paul Ceglia to 84 percent of the social network. Paul Ceglia sued Facebook and Zuckerberg in state court June 30, claiming that a contract from April entitles him to ownership of most of Facebook. Ceglia’s lawyer produced a copy of the document for a U.S. District Judge at a hearing in federal court in Buffalo, New York.

“Whether he signed this piece of paper, we’re unsure at this moment,” Facebook lawyer Lisa Simpson told the Judge. While Facebook hasn’t claimed the alleged contract with Ceglia is a phony, they have “serious questions” about its authenticity. And rightfully so. Zuckerberg’s stake in the company is in jeopardy. I can’t imagine Facebook investors are too happy with this lawsuit either. After all, according to SharesPost.com Facebook is valued at $24.6 billion.

Bloomberg also reported the details of the contract in question. According to Ceglia’s lawyer, Mr. Ceglia was a web designer trying to develop a project called “StreetFax” in the spring of 2003.  Ceglia’s plan was to put millions of photos of streets into a database and charge insurers money to access it.  “What he needed was a coder,” Ceglia’s lawyer told the judge.   Mr. Ceglia solicited bids to do the work. The lowest bidder was Zuckerberg, who at the time was just a Harvard freshman.  Zuckerberg said he would do the job for $1,000.

Now this is where it gets interesting. Zuckerberg allegedly told Ceglia that he was working on his own project, “I’m developing an online yearbook for Harvard kids now, but I’m thinking of expanding it.” The contract was intended to cover the coding work on StreetFax and Ceglia’s investment in Zuckerberg’s project. In response, Facebook claims Ceglia remained silent for more than six years and his claim is probably too old to pursue. Also, Ceglia claims his alleged contract, which refers to “The Face Book,” was signed about nine months before Facebook was founded, the company said in court papers.

What I want to know how is can Facebook be unsure whether Zuck signed the contract?  He either did, or didn’t.  I’m sure that is something Mark would remember.  It was probably a highlight in his life at the time – not something you would easily forget.  Nonetheless, I think Mr. Ceglia is going to have a tough time explaining why he waited so long to file his claim.  Maybe it has something to do with the fact Facebook is growing like crazy.  They just hit 500 million users, remember?  Either way, waiting this many years doesn’t exactly make him look like a saint.  To me, it makes it look like he’s in it for some quick cash and a huge stake in a growing company.

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