When the executives of social-networking Web site Facebook sued a German-based business that had launched a copycat site, it was accepted as a good move -- but was Facebook just sour over an offer gone bad?
Facebook officials filed suit against StudiVZ, a Germany-based social-networking Web site that is a near clone of Facebook, in a California court, saying the German site infringed on Facebook's look, feel, design and services.
StudiVZ (short for Studentenverzeichnis, which means "student directory") is offered in German, French, Polish and Italian. The social network was launched in October 2005 by three students from Berlin, but was purchased by one of its investors, German publishing giant Verlagsgruppe Georg von Holtzbrinck. The price tag was more than $100 million.
As of last month, the Web site, dubbed "Fakebook," reportedly had 10 million active users in Germany, Austria and Switzerland.
StudiVZ, reportedly one of the most popular and profitable Facebook-copycat sites, is denying Facebook's claims, adding that Facebook is just sour because it has not gained popularity in Germany since it launched a German version.
StudiVZ filed a motion in a German court saying the lawsuit is without merit.
Marcus Riecke, chief executive of StudiVZ, accused Facebook of trying to form an international monopoly.
"Now that Facebook, despite trying hard, has not been successful in the German market, the company seeks to obstruct StudiVZ through court action. Their strategy appears to be, 'If you can't beat them, sue them.'"
Fight for Germany
Some company insiders are adding to the StudiVZ sour-grapes theory by leaking information of an attempted buyout of StudiVZ by Facebook.
Executives at StudiVZ and additional unnamed sources, who spoke to The New York Times International Herald Tribune, said there were ongoing talks between the two companies for months on a buyout, but the two businesses could not come to a financial agreement. Sources said Facebook was not willing to pay StudiVZ the hefty price it was seeking.
The sources also said Facebook lacked the popularity it was hoping for in Germany.
An unnamed Facebook employee, however, told the Tribune that while there were talks between the two companies, it was about the copycat claims, not a buyout. A Facebook spokesperson told us the company "does not comment on acquisition speculation."
Although Facebook has not gained huge popularity in Germany, it is still light-years ahead of its competitors or knockoffs, according to one of its investors.
German entrepreneur Alexander Samwer said he and his brothers invested in Facebook in January after selling their shares in StudiVZ last year because Facebook had stronger technology and is more advanced. Samwer had provided the financial backing to launch StudiVZ. Samwer and his siblings are known for launching the Crazy Frog ringtone company Jamba, which was then purchased by News Corp.
StudiVZ could not be reached for comment.