Facebook to buy facial-recognition startup: sources

SAN FRANCISCO Mon Jun 18, 2012 5:04pm EDT

Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012. REUTERS/Valentin Flauraud

Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012.

Credit: Reuters/Valentin Flauraud

SAN FRANCISCO (Reuters) - Facebook Inc is paying $55 million to $60 million to buy Face.com, according to people familiar with the matter, acquiring the company that provides the facial-recognition technology used by the world's largest social network to help users identify and tag photos.

The deal bolsters one of Facebook's most popular features -- the sharing and handling of photos -- but the use of the startup's technology has spurred concerns about user privacy.

The No. 1 social network will pay cash and stock for Face.com, potentially paying as much as $60 million, two sources with knowledge of the deal said. Media reports in past weeks have pegged the transaction at $80 million to $100 million.

Neither Facebook nor Face.com disclosed terms of the deal, which is expected to close in coming weeks.

Facebook, which will acquire the technology and the employees of the 11-person Israeli company, said in a statement that the deal allows the company to bring a "long-time technology vendor in house."

Face.com, which has raised nearly $5 million from investors including Russian Web search site Yandex, launched its first product in 2009. The company makes standalone applications that consumers can use to help them identify photos of themselves and of their friends on Facebook, as well as providing the technology that Facebook has integrated into its service.

Facebook uses the technology to scan a user's newly uploaded photos, compares faces in the snapshots with previous pictures, then tries to match faces and suggest name tags. When a match is found, Facebook alerts the person uploading the photos and invites them to "tag," or identify, the person in the photo.

Responding to inquiries from U.S. and European privacy advocates, Facebook last year made it easier for users to opt out of its controversial facial-recognition technology for photographs posted on the website, an effort to address concerns that it had violated consumers' privacy.

The deal is the latest in a string of acquisitions by Facebook in recent months, including the $1 billion acquisition of mobile photo-sharing service Instagram. U.S. antitrust regulators are undertaking an extended review of the Instagram deal, which Facebook expects to close by the end of the year.

Shares of Facebook, which continue to trade below the price at which they were offered during the initial public offering in May, closed Monday's regular session up 4.7 percent at $31.41.

(Reporting by Alexei Oreskovic; Editing by Maureen Bavdek, Carol Bishopric, M.D. Golan and Dale Hudson)

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Comments (4)
Does facial-recognition matter?
It may not matter regardless of truth, lies, or half-truths that permeate cyberspace, and is probably no more accurate or inaccurate than, say, Twitter and how it is used.
A just published Scientific American magazine story illustrates this: “Most Twitter users mark success by the number of followers they’ve attracted. Companies in particular want potential customers to know that legions of consumers are following their every tweet.
“Take Dell Outlet, a Web site for buying refurbished computers. They claim to have more than 1.5 million followers. How did they do it? Well, they didn’t actually.
“A new research report analyzing Twitter followers of 39 international companies—including Dell, Coke and Vodafone—indicates nearly half of Dell Outlet’s followers were likely created by marketers. On the other end of the spectrum, less than seven percent of Starbuck’s followers were deemed to be dummy accounts.”
Whether Google, Twitter, etc., what is the truth?

Jun 18, 2012 2:44pm EDT  --  Report as abuse
Blackorpheus wrote:
Facebook is a narcissistic carnival. Utterly useless for anything resembling meaningful contact. Even by the Internet’s degraded standards.

Jun 18, 2012 10:41pm EDT  --  Report as abuse
Curmudgeon wrote:
Facial recognition technology is very good, and very scary. I studied it as an AI researcher years ago. But we went about it all wrong. All it really requires is very fast computers, good search algorithms, and a large database of faces; eg, Facebook. In another year or two, we will have the ability to take someone’s photo on the street and through a search (Google or Facebook) bring up all of their personal details in seconds. http://wp.me/pJhAL-8U

Jun 19, 2012 2:30am EDT  --  Report as abuse
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