Web designer claims 84% ownership of Facebook

Does Zuckerberg really own Facebook? N.Y. man files suit over alleged contract

A lawsuit filed against Facebook Inc. is raising the question of whether Mark Zuckerberg is the owner of the phenomenally popular social networking site.

Paul D. Ceglia of Wellsville, N.Y., filed the lawsuit in New York Superior Court on June 30. The Web site designer alleges that he signed a contract with Zuckerberg, the site's founder and CEO, in 2003 that entitles him to 84% ownership of the company.

According to court documents, Ceglia claims he had a written agreement with Zuckerberg to design and build the site that eventually turned into the wildly successful Facebook. He also alleges that he was paid $1,000 for the work and for a 50% stake in the site, along with an extra 1% for every day until the Web site was completed.

That, according to Ceglia's suit, adds up to an 84% ownership of the social network, which has more than 500 million users.

Facebook, however, says that's simply not the case.

"We believe this suit is completely frivolous and we will fight it vigorously," said Andrew Noyes, a Facebook spokesman, in an e-mail to Computerworld.

After Ceglia filed the suit, a New York Supreme Court judge issued a restraining order prohibiting Facebook and Zuckerberg from transferring any assets. For its part, Facebook filed a motion to have the case dismissed.

The case has been moved to federal court, and Facebook has moved to have the restraining order removed, according to Noyes.

"These kinds of suits come with the territory whenever any business becomes wildly successful," said Dan Olds, an analyst with The Gabriel Consulting Group. "These suits are usually dismissed or settled as nuisance suits. But because the judge issued an order, it may mean that there could be something there."

Olds added that he's highly skeptical about the claim. "But if he does have a case, and if he ends up owning 84% of Facebook, then it will make a hell of a movie."

This isn't Ceglia's first court dealings.

Late last year, New York Attorney General Andrew Cuomo obtained a temporary restraining order against a western New York wood-pellet fuel company, Allegany Pellets LLC. Ceglia and his wife, Iasia, own the company, which allegedly took more than $200,000 from consumers and then failed to deliver products or refunds.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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