Court documents in the ConnectU case reveal that when it comes to the price of Facebook common shares, Facebook's board values the company at $3.75 billion — far lower than the $15 billion valuation set by Microsoft's $240 million purchase of 1.6 percent of the company. As an investor, Microsoft owns preferred stock — worth more in part because, in case of an acquisition or an IPO, it's the stuff that gets sold first. That means Facebook board really thinks the company isn't worth $3.75 billion or $15 billion, but somewhere in between. Actual shareholders — including Facebook employees, we've heard — are more than willing to move their shares at a $4 billion valuation. The revealing court documents, in which ConnectU lawyers complain about Facebook's valuation, are embedded below. Before you feel too sympathetic, ask yourself: Isn't this the kind of thing lawyers are paid to know?

Released court transcripts from the last skirmish in the ConnectU-Facebook legal battle — in which Facebook CEO Mark Zuckerberg was charged with nicking the code for his site from a rival social network — reveal why ConnectU founders Divya Narendra, Cameron Winklevoss and Tyler WInklevoss returned to the fight this summer after settling with Facebook in February. It seems they thought their original lawyers didn't make as much from the deal as the ConnectU founders thought they would. In the February settlement, ConnectU sold itself for Facebook shares which the founders figured would have a value similar to those bought by Microsoft, which paid $240 million for 1.6 percent of Facebook, valuing the company at a notional $15 billion. The transcripts show that while Microsoft bought preferred stock in the company, ConnectU's founders were awarded common shares. That kind isn't worth nearly as much. In fact, given the problems Facebook shareholders have had selling their private shares, the settlement might not be enough to pay ConnectU's legal bills. The founders' first team of lawyers have asked the Judge not to award ConnectU its settlement funds until its legal bills are paid first.

The great myth of every presidential campaign since 1996: This is the year that the Internet changes everything. The Valley would like to take credit for Barack Obama's coronation as the Democratic contender — after all, didn't Facebook cofounder Chris Hughes leave the hot startup to run Obama's Web operation? Obama did milk his tricked-out website for much-needed publicity, it's true. But now that he's hit the big time, he's spending his money on television, not the Web. Obama, McCain, the parties, and other political actors are expected to spend a record $800 million on television ads between now and the November election. Why spend money online? Targeted advertising means that Obama's just preaching to the converted, who persist in the delusion that inbound hyperlinks tracked by Technorati are as good as votes. They're not, and Obama knows it — which is why he's using the Web to take money, not spend it. As ever, Washington sees Silicon Valley as good for only one thing: its pocketbook, not its ideas.

The only thing worse than having potential johns ringing your mobile at all hours? Not actually working in the sex industry, but having the same call-screening woes. 23-year-old Brit Kerry Harvey knows all too well, and she blames not the poor manners of the punters, but Facebook, for allowing a fakester profile using her photo, actual date of birth, and phone number, listing her occupation as Prostitute. Boys, are we 12?

Facebook released its schedule for its second annual F8 developers' conference on July 23. Facebook's servile, so-called independent developers have three tracks to choose from: "User Experience," "Technical," and "Business." If you work for a Facebook widgetmaker, you're probably confused, because who among you trying to build a business on the Facebook platform doesn't also need to be fully briefed on its user experience and technical aspects? To clarify, we've translated Facebook's description of each track out of verbose PRspeak.

Facebook's list of supported browsers does not include one that's proven relatively popular (if by hook or by crook) — Microsoft Internet Explorer. As blogger Dan Lewis points out, Microsoft may have invested $240 million in the social network startup, and you'd think that would win them some favors:

Every morning we check Google News for Facebook-related stories and without fail, always find a news story or two illustrating how vastly more entertaining Facebook is for the rest of the world. Australians, Britons and Spaniards seem to use Facebook only to plan huge flash-mob parties at beaches, pools and vacation homes. Here, we sometimes get Facebook invites to Tech Karaoke. In America, the only crimes Facebook facilitates are child porn and child molestation — depressing, not fun. Abroad, Facebook figures prominently in stories of murder, prostitution, and even clashes against the government. Below nine news stories showing exactly how much more enjoyment foreigners are having getting into trouble with Facebook. Here in the States, we're sitting at our computers while wondering how Facebook's going to make money, or something. Clearly, we're doing it wrong.

The legal case opened by ConnectU founders Cameron Winklevoss, Tyler Winklevoss and Divya Narendra against Facebook CEO Mark Zuckerberg is closed, but the courtroom drama continues. CNET has filed an objection to San Jose District Court Judge James Ware's decision to close the courtroom and put all the evidence under seal. What's in those documents that might be so interesting? Facebook's internal valuations, for starters. But most intriguing are the purported instant message conversations that the plaintiffs were led to believe provided proof that Zuckerberg is a little thief. (Photo by AP)

For the makers of widgets, those annoy-your-friends applications littering social networks, it's fractions of pennies from heaven: AOL ad network Platform-A has promised Facebook and Bebo widget developers that it can guarantee them "one of the industry’s highest" CPM — cost per thousand pageviews — rates if they sign up for its Widgnet publisher network. A Platform-A source says widgetmakers will get about 40 cents per thousand pageviews. Which is, of course, terrible. "Most [widgetmakers] won't sniff $1 CPMs," AdWeek's Brian Morrissey snarks.(Photo by MrVJTod)

Facebook founder Mark Zuckerberg hasn't moved the company quickly enough toward an IPO for some shareholders. According to reports, some have begun trying to sell their shares at a steep discount to the $15 billion valuation afforded by Microsoft's $240 million purchase of a 1.6 percent stake last fall. One such shareholder, supposedly a Facebook employee, tried to sell 0.25 percent of the company at a $5 billion valuation in April and could not. More recently, a shareholder represented by California money manager Bill Dagley — possibly the same one — has been trying to move shares at a price that values the company around $3 billion to $4 billion. Back to your caves, Facebook bears. That shares are on the block at a price much lower than Microsoft paid does not suggest Facebook's value is spiraling downward.

Facebook will announce this week that it's brought Silicon Valley wunderkind turned Web 2.0 grumpy grandpa Marc Andreessen onto its board of directors. Andresseen will fill one of the two open seats on Facebook's five-person board. Founder Mark Zuckerberg and investors Peter Thiel and Jim Breyer make up the rest.

Facebook announced today that even though users are now required to specify their gender on the site, it is still possible to "remove gender entirely from your account." The impulse behind the change is part grammatical — a stream of "thems" in the NewsFeed has gotten old, and can now read "him" and "her" — but with the opting-out option in place, it's also a graceful move to acknowledge that, as Facebook product manager Naomi Gleit put it, "the male-female distinction is too limiting." And the tiny checkbox gender revolution comes just in time for tonight's third annual Transgender Pride March in San Francisco. Vive la Différence! (Photo via Genderfork)

Blake Commagere created the all the widgets you hate most on Facebook — the Zombies, Werewolves, Vampires and Slayers. The ones that spam you with bites and inspired knockoffs like Pirates and Ninjas that everyone also hates. You'd think Blake would hide from publicity given his monstrous creations, but no, today we found him giving an interview to Silicon Alley Insider, saying how "totally wrong" people are who (like us) say that Facebook apps should be useful instead of annoying.

SocialMedia is an ad network that partners with Facebook widgetmakers and serves ads to their users. It decides which ads to serve based on information those users agree to release to widgetmakers when installing their apps — information like who they're friends with and how they interact with them on Facebook. Also using that information, SocialMedia sometimes puts the faces of users' friends in the ads, calling these ads "Social banners." So far these ads appear only in widgets themselves, but they could be distributed across the Internet. We're not concerned about the privacy issues, because they're boring and for old people who might not even list themselves in the white pages, let alone overshare like a good millenial. We do wonder, however, if SocialMedia will make money.

When Facbook and the ConnectU founders who say Facebook founder Mark Zuckerberg stole their code settled in February, ConnectU founders Cameron Winklevoss, Tyler Winklevoss and Divya Narendra figured they were getting stock in a company worth $15 billion. Not so, according to Facebook laywers and the federal judge who ruled in their favor. From the Judge's ruling:

If you were over 30 years old when you signed up for Facebook, you never got the option to look for "Random Play" — that's what the "kids" are calling it now. Sheryl Sandberg's new No Fun regime at Facebook has taken it a step further: They've removed the Random Play option from some people, including me, who'd already checked it. Now all users' inner sluts have been caged, at least as far as the interface is concerned.

Until last night, Top Friends by Slide was Facebook's third most popular widget, judging by daily active users and installations. Today, Top Friends is no longer on Facebook at all. News.com says its because pesky Canadian Byron Ng discovered a security loophole in the widget that allowed any user with Top Friends installed to view more profile information — birthdays, gender, and relationship statuses — then Facebook allows strangers to see. Ng discovered a similar loophole in SuperWall, an app made by Slide rival, RockYou. But RockYou already fixed the problem and SuperWall remains on the Facebook platform. No word on whether this little tidbit has Slide founder Max Levchin in this hospital from punching holes in a wall or two. (We hear the rivalry is a little intense).

Harvard classmates and ConnectU founders Cameron Winklevoss, Tyler Winklevoss and Divya Narendra signed a settlement with Facebook founder Mark Zuckerberg in February, and despite what the ConnectU founders say is relevant new evidence, a federal judge ruled yesterday that the settlement will stick. "The court finds that the agreement is enforceable and orders its enforcement," the order said. We prefer how the last judge ruling on the case put it, describing the ConnectU founders suddenly renewed interest in revisiting the settlement with new lawyers as little more than "buyer's remorse."