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Why Facebook's Mark Zuckerberg Won Against Winklevoss Twins

Can you imagine being beaten again and again by a college dropout that does not come from blue blood stock? Well, it happened again to the Winklevoss twins and their Harvard classmate Divya Narendra. A three-judge appellate court panel upheld a 2008 deal between the trio and Facebook founder Mark Zuckerberg. The twins and their friend will have to settle for a share of Facebook now estimated to be worth $160 million (and growing).

Court ruling

In delivering the Court's ruling, the Chief Judge, Alex Kozinsky, hit the nail on the head by saying "The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace... At some point, litigation must come to an end. That point has now been reached."

Winklevoss reaction
Before the ink was dry on the Court ruling, the twins promised to press forward with another appeal. Their attorney, Jerome Falk, said in a statement that his clients would ask for a hearing by a full 11-judge panel (We, in California, hope they pay the court costs because the State surely doesn't have the money right now).

What does the general public think of this clash of gazillionaires?

Public View
According to the Los Angeles Times, "The Winklevosses have taken a lot of public guff for their relentless pursuit of Facebook, in large part because the settlement they reached had soared in value along with the value of the privately held company."

The New York Times says, "...when you grow up, say, tall, rich, and handsome, you might not have to work to attract the other (or same) sex, and then you might never develop certain evolutionary pluses, like the ability to overcome adversity, accept defeat, and learn humility."

At last count, in response to a poll in the Guardian that asked, "Were the Winklevoss twins entitled to more?" 18.6% said "Yes" and 81.4% said "No."

Comments at the end of the poll were more telling.

  • 10:15PM i can't stand these guys. even IF zuckerberg did build on their idea, they didn't create the business that Facebook is. they are in NO WAY entitled to FB's earnings. Expletive Deleted.
  • 10:53PM As unsympathetic as the portrayal of Zuckerberg was in The Social Network, any guy who comes up with descriptors like "the Winkelvii" is okay in my book.
  • 11:39PM To paraphrase a quote in The Social Network: "The Vinkelvii are upset that for the first time in their lives things didn't happen the way they wanted them to".
    You can't not sense this feeling of privilege they portray.
Credibility and Image Issues

Even though some believe the movie Social Network portrays him in a negative light, most seem to have great admiration for Mark Zuckerberg and his accomplishments at Facebook. Those that know him say he has never been about making money. He dresses and lives modestly, and people that work with him say he is brilliant. He has already pledged $100 million to Newark schools (some view this cynically), and he is one of 17 Americans (or families) that has pledged most of his wealth to charity. This has given him a largely positive public image.

Whatever you think of the Winklevoss Twins, they are very accomplished. They have intelligence, sports prowess, and play musical instruments. Even if perfect, however, they would have an image problem because most Americans admire those that create their own wealth far more than those that were born into it. What has perhaps hurt their credibility the most is their actions related to the lawsuit against Facebook summarized below.

  • Hired top experts (including their father who taught at Wharton) to do an appraisal of Facebook.
  • Based on the appraisal, they settled for $65 million, which has now turned into $160 million.
  • They refused to pay their lawyers and sued them for malpractice.
  • They lost an arbitration and owe those lawyers $13 million, which they have not paid.
  • After agreeing to the Facebook settlement, they sued again for more (aiming for $600 million).
  • In the same breath, they claim they are suing for moral reasons, which if true, is not at all believable.
  • As soon as the appellate ruling was read, they did not accept it and vowed to pursue further litigation.
As Forbes blogger Kerry Dolan says , "In real life the Winklevoss twins don't come off nearly as well as they do in the movie... To me, they just come across as spoiled greedy kids."

Based on what you know, who do you think has a better corporate image Mark Zuckerberg or the Winklevoss twins?


Ira Kalb is president of Kalb & Associates, an international consulting and training firm, and professor of marketing at the Marshall School of Business at University of Southern California (USC). Follow him on Twitter.
image courtesy of flickr user, Ludovic Toinel
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