Well, we finally know what Facebook is really worth -- or, at least, what Facebook thinks it is worth: about US$3.7 billion. That would be $11 billion less than Microsoft thinks Facebook is worth, give or take a few hundred million.
How do we know this? A sealed agreement that came unsealed, thanks to the techno-stupidity of the legal experts involved and the magic of copy and paste.
But first, some background.
Back in 2004, ConnectU founders Divya Narendra and twins Tyler and Cameron Winklevoss accused Facebook boy wonder Mark Zuckerberg of stealing their idea for a social network (then called Harvard Connection) after they hired the geeky sophomore to do a little coding for them. Naturally, they sued.
Last April, they settled the suit for an undisclosed amount, which we now know to have been US$20 million in cash, plus $11 million to $45 million in stock, depending on whether Facebook was worth about US$9 a share (its own estimate) or US$36 (Microsoft's valuation).
You'd think $20 million in US greenbacks would be enough for anybody, not even counting the stock, but you'd be wrong. After a PI uncovered more allegedly incriminating evidence against Zuckerberg, Winklevoss et al tried to overturn the agreement, thinking they could wring a lot more money out of Plucky Zucky.
Last June a judge said no way, Winky. A deal is a deal. You signed it, you own it. Now beat it.
Then ConnectU's original attorneys -- Quinn Emanuel Urquhart Oliver & Hedges -- published a brochure boasting how they managed to squeeze US$65 million out of Facebook [PDF], thus breaking the seal on the agreement. California law journal The Recorder broke that story earlier this week.
Associated Press tech reporter Michael Liedtke found the transcript of the legal discussion surrounding that decision. The court had redacted the bits in the PDF file relating to the amount of the settlement. But then Liedtke copied the text from the PDF file to his word processor and -- hey presto! -- the redacted text magically appeared, including the discussion about what Facebook thinks its own stock is worth.
(You can do it too -- it's fun for the whole family. Just open this PDF file and look for sections marked "REDACTED.")
So now we know the whole story. And with characters like Divya, Plucky, and the Winky twins, it's like a fairy tale -- only in this case all the fairies seem to be attorneys, and there are no heroes, just villains.
Is Facebook even worth US$4 billion? More important, if all these people really are that stupid, how did they get to be so rich?