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Did Facebook get caught stealing? Rather than getting coshed over the head with a law suit, I want to state that I have no idea whether Facebook and its founder were guilty or not.

All I know is that the founders of ConnectU were incredibly persistent in their law suite against Mark Zuckerberg and Facebook. It’s been on the go since 2004 and it seems that a settlement has finally been reached.

ConnectU contend, according to Wikipedia, that there had been an oral contract in place for Mark Zuckerberg to build the original Facebook site. Zuckerberg then copied their idea and used source code that belonged to them to start Facebook with.

Finally, five years down the line Facebook has agreed to part with around $65 million in cash and shares to try and make this problem go away. There is some doubt as to the amount due to Facebook insisting on keeping the final details secret. Regardless the actual amount, for a ‘non-theft event’ that is a nifty little payment.

Whatever the circumstances behind this case might be, one thing is certain, some part of this story must be true otherwise there would not have been this kind of protracted court case. Alone the legal and opportunity costs that ConnectU must have had to expend would have been high.

What is perhaps a more serious case is that this entire affair has in no way damaged the reputation of Facebook or Mark Zuckerberg. This business is still perceived to be the company of the future.

Besides the question mark against the reputation of this business and its founder the business model itself is questionable. Since it’s start in February 2004, Facebook has yet to post a profit. And it isn’t anticipated to post one any time soon.

There are other issues too, such as privacy. Any time a platform is this open to users, advantage may be taken by less scrupulous individuals or companies. Facebook itself is not entirely innocent in terms of its use of information provided by members.

Possibly some of these issues stem from new businesses operating in an unchartered territory such as the internet. On the other hand basic principles such as honesty and integrity and making a reasonable profit are surely important no matter whether a 20th or 21st century business.