Mother lodes

Facebook: Facebook’s success may seem sui generis. But the social network’s disputed paternity and burgeoning value — as much as $85 billion at last check — is creating a familiar commotion. People are coming out of the woodwork to claim a share of Mark Zuckerberg’s creation. In that respect, the story bears striking parallels with past bonanzas, especially Nevada's wild silver rush 150 years ago.

The Comstock Lode was the Silicon Valley of its day. The market value of companies excavating its wealth was around $40 million by 1865, about half the value of all the real estate and personal property in San Francisco at the time. That would equate to about $60 billion in today's economy. The ecosystem that sprung up around the mines included engineers developing new technologies to extract silver from stone. Hundreds of companies were formed. A few captured nearly all the spoils. Just as today, the combination of uncertain ownership and tremendous wealth invited controversy. Miner Gould & Curry, for example, attracted 15 lawsuits in one year. Such legal claims consumed an estimated 20 per cent of the revenue generated by the Comstock Lode in the first several years of operation.

The outcomes resemble Facebook's travails. Early and important figures - Eduardo Saverin at Facebook or James Finney at Comstock - were celebrated as genial figures, but pushed out for a fraction of the eventual riches. And like the Winklevoss twins suing Facebook today, others who claimed to own Comstock Lode land but who didn't do any heavy lifting were given a chunk of cash and told to go away.

Outsiders can’t tell whether today’s claimants are victims or opportunists. The latest is Paul Ceglia, a wood-pellet salesman and accused larcenist, who says he bought half of Facebook in 2003. Some mine owners took money from investors before telling them a rich shaft was worthless. Other plaintiffs submitted fabricated evidence against wealthy miners.

The parallels do have their limits. Zuckerberg isn't like Henry “Pancake” Comstock, for whom the lode was named. Comstock finagled his way in using $50 and a blind horse. Zuckerberg actually built Facebook. That’s significant. An untapped mine with rich silver deposits is worth a fortune. An undeveloped social network is just a good idea.