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Facebook Does An About Face: Suing Connect-U?

Wednesday, 25 Jul 2007 | 4:53 PM ET

In my previous post, I wrote about how Facebookis being sued by the creators of Connect-U.But here's a twist: Facebook is also reportedly SUING them right back. I just interviewed Fortune Magazine Senior Editor (and a former colleague of mine), David Kirkpatrick who's spent quite a bit of time with Mark Zuckerberg and Facebook's managing team recently. He pointed out that Zuckerberg and crew have been so busy growing Facebook and making it the hottest company in the Internet space--or perhaps any space--that they're not thinking about this suit at all. It's small potatoes.

More interesting, Kirkpatrick tells me that Facebook is suing Connect-U for allegedly trying to hack into Facebook in order to steal the e-mail addresses of users, and to try to lure them to Connect-U. Even if it's true, it failed miserably. Facebook has some 29 million plus regular users, Connect-U has a paltry 70,000. They're still in the discovery phase of the case. But boy would that be a juicy lawsuit!

Bottom line (to answer some questions I've been getting from readers), the chances of the Winklevosses (creators of Connect-U) winning are unlikely, and even if they do win, and Facebook has to pay some amount of money, it's likely to be too small an amount to affect Facebook's burgeoning business--and it wouldn't affect Facebook's valuation. Kirkpatrick says: "the idea is an miniscule piece of what causes a company to succeed. Facebook has succeeded because Mark Zuckerberg and his partners have gone through so many decisions, iterations of iterations to build this business."

Tune in for more on CNBC's "On the Money" tonight!

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.