The demise of the Dot.com phenomenon has been predicted many times but it has managed to return time and time again on the wave of a new trend and has made a small number of individuals fabulously wealthy on each occasion. The most recent trend in social networking sites has born witness to this with significant sums of money changing hands for sites such as MySpace, which was bought by News Corporation for $580 million in 2005. The new challenger in the battle to get your life story on a website together with some less than flattering photos is Facebook. Facebook projects a communal spirit and encourages us all to meet people, stay in touch and forge friendships over the internet. Lying behind this friendly ethos however is a tale of an acrimonious split between the college colleagues who came to together to create Facebook.
The man behind Facebook, Mark Zuckerberg, stands accused by three of his former Harvard colleagues of stealing the idea for the site. Cameron Winklevoss, his brother Tyler and Divya Narendra had teamed up with Zuckerberg while at university to work on a social networking site project. Zuckerberg was the last of the four to become involved in the project and the three founders now claim that he deliberately stalled the progress of their site, set up a rival site and stole source code and design elements of their fledgling social networking site, ConnectU. Zuckerberg has responded by raising an action of defamation.
The truth of the matter in the case of Facebook will be for a judge in Boston to decide but the moral of this tale is already clear and is highlighted in details revealed by the parties regarding their working relationship. The ConnectU three explained that Zuckerberg was not paid for the work that he did on their site but that he was a full member of their team and would have shared in any future benefits. Zuckerberg claims that he was asked by the ConnectU team to do about six hours of work. Zuckerberg also stated that he was not paid for this work and went on to note that he did not sign an agreement. ConnectU have asserted that Zuckerberg agreed to an oral contract and claim to have email records to prove it.
These details serve to highlight the potential pitfalls of involving a third party in the development of a project with out first making a careful assessment of the terms of that involvement. It is very important to clarify what role that person will be providing, whether that be as a consultant or as an employee; what information that person will have access to; and crucially what form of agreement you should have in order to protect yourself from a situation similar to that which the ConnectU team claim to find themselves in. For the ConnectU team the value of protecting their intellectual property and confidential information by putting agreements in writing could have been worth billions of dollars.