Venture Capital Firms

Facebook Tries to Take the Power Away from Power.com

Based in Brazil, Power.com is a unique social network that allows you to sign in and access other social networks, such as Twitter, Linkedin, Orkut, MySpace, Facebook, and Hi5. What makes Power.com different from other social networks, is that you do not need to sign up like you need to do with other social networks. If you are already signed in in one of the above mentioned social networks, you just need to type in your username from one of those networks and type in the password that you use for that network and you are in. Power.com allows you to access all the information in your other accounts and use them on Power.com

This new service by Power.com, however, does not come smoothly. In January of 2009, Facebook did not like Power.com’s platform and sued the company for infringements on copyrights. Facebook does not like that users can log on to their Facebook accounts from other social networks, and this is the reason for the lawsuit. In fact, Facebook prefers that its users would log on directly to the Facebook website. The lawsuit was filed in the US District Court in San Jose. Other claims that Facebook has made against Power.com are of unlawful competition and Facebook also claims that what Power.com is doing is also a violation of the Computer Fraud and Abuse Act.

Barry Schmidt, a spokesman at Facebook stated in an article from the New York Times dated January 2, 2009 that Facebook had several discussions with Power.com over this issue for over a month without any concessions from Power.com, Facebook decided to take the company to court. According to Steve Vachani, founder of Power.com, the company wanted to work together with Facebook on how to best create this service and wanted to cooperate with Facebook, but obviously Facebook decided to take another direction. The complaint that Facebook filed states that Power.com uses a program that solicits uses and saves all of Facebook’s users’ login data for use on its own website. Furthermore Facebook also claims that Power.com also sends emails that are misleading advertisements to the Friends of Facebook.

The fight does not end there, in fact recently it just got hotter with Power.com counter suing Facebook, claiming that Facebook is a monopoly and argues that Facebook is curbing the competition by restricting its users to the Facebook server and by blocking users’ access to Power.com. Furthermore, Power.com charges Facebook with monopolization of the trade because Facebook has made billions of dollars while restricting users’ data within its service and Power.com also claims that Facebook only decided to sue them after they refused to follow the rules that Power.com worked out together with Facebook.

Power.com is a ptivately owned venture backed company with three people on its management team. The people on the management team include Steven Vachani, CEO; Boyan Josic, director of corporate development; and Eric Santos, director of public engineering.

Power.com’s investors include Draper Fisher Juvertson, or DFJ, and Esther Dyson.

Based in Menlo Park, California, DFJ is a premier vc firm that focuses its investments on early stage companies. Besides its headquarters in Menlo Park, DFJ is also global with offices in Shanghai, China and in Bangalore, India. DFJ is an active investor that provides its portfolio companies with more that just the necessary capital they need to run successful companies. Other companies in DFJ’s portfolio include 4info, Abuzz, Achex, AppStream, Boxbe, and others.

Esther Dyson calls himself a catalyst for startup companies and his vc firm is EDVentures, which invests in markets throughout the United States and other markets throughout the world, including Russia.

Power.com has one competitor that is worth mentioning, FriendFeed. FriendFeed is a social network that provides the same kind of service that Power.com provides. FriendFeed is a privately owned corporation, which employs nine people and has four people on its management team.

For more information about Power.com, click here.

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