News : German "fakebook" site incurs wrath of Facebook

By Nicola Leske

FRANKFURT (Reuters) - Ehssan Dariani, founder of German social network studiVZ, never made any secret of his admiration for Facebook, which is now suing studiVZ for copying its ideas and look.

When he and two of his friends launched studiVZ (www.studivz.net) in October 2005, it was modeled after the U.S. network that began as a way for college students to keep in touch and became an online phenomenon.

In fact, studiVZ is so close to the original, the German network for students has been dubbed "fakebook".

Dariani is reported originally to have wanted to create a men's cosmetics line. But that endeavor failed to take off and he found inspiration instead in U.S. social networks Facebook and MySpace.

He managed to persuade two friends to launch studiVZ. The founders of online T-shirt shop Spreadshirt provided initial funding of 5,000 euros ($7,960) and within months studiVZ turned into Europe's largest student social networking site.

Facebook filed a complaint last Friday accusing studiVZ of copying the look, feel, features and services of Facebook, ultimately seeking to put an end to the German site.

The name studiVZ is an abbreviation of "Studienverzeichnis", which means "students' directory" in German, and the site -- while it visually resembles Facebook, only in red instead of blue -- is more practical than playful in its features.

It has since branched out into SchuelerVZ for school pupils and MeinVZ for graduates and non-students.

Industry experts attribute some of studiVZ's success to the fact that Facebook waited too long to make its site available in foreign languages. Facebook launched a German version in March.

Facebook's deputy general counsel, Mark Howitson, says: "We... are very disappointed that studiVZ has unfairly used our creativity, innovation and effort by building a 'clone' site to compete directly against us."

StudiVZ's Chief Executive Marcus Riecke is unruffled: "Their strategy appears to be: 'If you can't beat them, sue them'."

PRIVACY CONCERNS

According to data on its website, studiVZ currently has more than 10 million members in Germany, Austria and Switzerland and continues to add hundreds of thousands of users every week.

Despite its popularity and success, studiVZ has had its share of negative headlines in privacy-conscious Germany.

Aiming to become more attractive to advertisers, studiVZ changed its terms and conditions at the end of last year and began categorizing its users so that advertisers could target them more accurately.

That provoked fierce criticism from users and German consumer association VZBV, as the new terms allowed studiVZ to obtain consent for the use of personal data through a single click but did not give sufficient details as to how it gathered information or how it would be used.

Facebook has also felt compelled to give users more control over who can see their data in response to privacy concerns.

StudiVZ later issued a statement saying it did not pass on information about users to third parties.

Founder Dariani has come under attack himself for a party invitation on a website modeled after the Voelkischer Beobachter, a notorious Nazi propaganda newspaper. Dariani said it was meant to be a Nazi satire and later apologized.

StudiVZ also made headlines with a case of mass cyberstalking and users complaining about security leaks. The site was forced to reset members' passwords after hackers cracked the system.

German publisher Holtzbrinck Verlag -- which owns Macmillan books, Scientific American and a stable of newspapers including Die Zeit -- is convinced of studiVZ's potential.

Last year, its Holtzbrinck venture arm bought studiVZ for a reported 80 million euros.

But German Internet entrepreneur Alexander Samwer, who with his two brothers is best known for founding the Crazy Frog ringtone company Jamba that was later bought by News Corp., is placing his bets on Facebook.

"Facebook is light years ahead of studiVZ," Samwer told Spiegel magazine in an interview.

In January, the Samwer brothers invested in Facebook after selling their stake in studiVZ last year.

(Editing by Richard Hubbard)