New York man pushes ahead with Facebook ownership claims

In an amended complaint, Paul Ceglia says he owns 50 percent of Facebook and provides e-mails between him and Mark Zuckerberg

A New York man who claims he's entitled to a sizable stake in Facebook has amended his initial complaint, adjusting his ownership claim and providing additional documents, including e-mails he allegedly exchanged with Mark Zuckerberg.

Paul Ceglia now claims that he owns 50 percent of Facebook, a stake he alleges he contractually acquired by investing US$1,000 in the venture back in April 2003, when the social-networking site was an early stage project and idea Zuckerberg was working on.

Should Ceglia succeed in his claim, his $1,000 investment would net him a stake worth about $25 billion, according to the most recent Facebook valuation, in what is now one of the most popular and successful websites in the world.

In addition to a copy of a contract he and Zuckerberg allegedly signed back then, Ceglia has now also provided the text of a series of e-mails the two men exchanged between 2003 and 2004.

In the messages, portions of which are contained in the amended complaint filed on Monday with the U.S. District Court for the Western District of New York, Ceglia seeks updates on the project, then called The Face Book, and he and Zuckerberg discuss plans for the site's design and business model.

While cordial at first, the messages turn increasingly terse and tense, with Ceglia at one point threatening to complain to the parents of the then-Harvard student. Ceglia alleges he gave Zuckerberg an additional $1,000 in November 2003.

According to the e-mails, things turned decidedly sour after the site finally went live in early February 2004 and Zuckerberg allegedly backtracked on plans to have an online store for college-branded products, like shirts and coffee mugs.

"Now that the sites (sic) live I feel I must take creative control and I just can not risk injuring my sites (sic) reputation by cheapening it with your idea of selling college junk," reads an e-mail allegedly from Zuckerberg to Ceglia, in which Zuckerberg adds that he has decided to put the revenue-generation issue on the back burner and focus on making sure the site catches on.

In the weeks and months that followed, Zuckerberg allegedly tried to cut ties to Ceglia, offering at various points to reimburse him the $2,000 investment, but Ceglia alleges that he never agreed to those offers, and that thus he still owns 50 percent of the company.

Ceglia originally met Zuckerberg when the latter responded to an online ad Ceglia had placed seeking programmers for his online service StreetFax.com, a database of traffic intersection photos and information aimed at insurance adjusters.

Ceglia paid Zuckerberg $1,000 for his coding work for StreetFax.com, and another $1,000 as an investment on Zuckerberg's social-networking-site project. The contract Ceglia submitted to the court is allegedly signed by Zuckerberg and stipulates granting Ceglia 50 percent "in the software, programming language and business interests derived from the expansion of that service to a larger audience," in reference to what later became Facebook.

Facebook didn't immediately respond to a request for comment.

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Tags social mediainternetFacebooklegalsocial networkingInternet-based applications and servicesCivil lawsuits

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Juan Carlos Perez

IDG News Service
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