“Right now, [Zuckerberg] should practice benign neglect,” says Anderson. “[He should] pay attention to his business, and not let [the lawsuit] get in the way” of his “fantastic” work as the head of Facebook.
Anderson is referring to the suit filed by small businessman Paul Ceglia, whose claims of last year — that a 2003 contract with Zuckerberg entitles him to at least half of Facebook — resurfaced in an amended complaint filed on Monday.
“One of the few resources that [Zuckerberg] doesn’t have is infinite time, and his plate is already pretty full,” Anderson added.
Anderson knows a little about corporate crises. The founder of The Yankee Group and co-founder of Battery Ventures has been teaching M.I.T. students about startups, venture capital, and crisis management for the last decade as a senior lecturer at the school’s Sloan School of Management.
Facebook has already called Ceglia’s claims complete fabrication, saying that while Zuckerberg did programming work for Ceglia in 2003, none of it qualified Ceglia to receive a stake in Facebook. The company has added that the claims are “absurd,” “frivolous” and that it feels “confident in [its] assessment.”
That’s enough, says Anderson, who suggests that Facebook’s attorneys now take over completely and fight Ceglia’s claims in court, if need be.
Suits like Ceglia’s “happen all the time with successful companies,” observes Anderson. “People come out of the woodwork and say, ‘I met this guy on the plane and gave him an apple and he said he’d give me half his company.’”
But while it often makes sense for companies to make such “nuisance suits” go away for a certain amount of money, Facebook will be courting an endless line of money grubbers if it pays Ceglia to disappear, particularly after settling with the Winklevoss twins, suggests Anderson.
“Settling with [the brothers] was probably a good decision,” says Anderson. “There may have been justification to settle in that [first] case.” Ceglia’s suit, meanwhile, is one that Facebook needs to fight, even if it costs the company far more than a settlement might, he says. “[Facebook] doesn’t want to encourage other people from [pursuing suits]. You want to make it clear that you won’t be trifled with, even if it’s a non-economic decision.”
Indeed, Anderson says Facebook’s best move right now is simply beefing up its internal legal department.
“Boy, you hate to spend the money, but this company is going to need it,” he says. Suits like Ceglia’s are “truly the tort lawyers’ full employment act.”