* No terms revealed
* Facial recognition a controversial topic
By Alexei Oreskovic
SAN FRANCISCO, June 18 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
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.