Guy Grimland of Israeli business newspaper TheMarker published

two articles (both are in Hebrew) this morning about a rumored relationship between Facebook and Face.com. The first article claims that Face.com rebuffed an acquisition offer worth ‘tens of millions of dollars’. The second article claims that Face.com is powering Facebook Photos’ facial recognition functionality, which was clearly upgraded in the past few months, albeit, with no indication there was a third party involved.

While the acquisition claim has been swirling around in the local startup community for a couple of months, no numbers have been mentioned. Worthy to note the fact that the company recently raised a $4.3M round of financing, led by Yandex. If the acquisition offer claim is true, both Face.com and its investors clearly believe the future holds a bigger liquidation event than an aqui-hire scenario.

The second rumor, about Face.com powering Facebook’s facial recognition functionality, is more interesting in my opinion and makes more sense for a couple of reasons.

For one, Face.com’s facial recognition algorithms are really quite effective. We wrote about their remarkable quality when the company first launched nearly two years ago. Secondly, from a technology standpoint Face.com’s ability to provide facial recognition economically on a massive scale, has been touted as one of the company’s major IP attributes.

In the case of Facebook, being able to provide such functionality in an economic manner from a computing resource perspective must be seen as a major upside, if not a vital one.

I reached out to Gil Hirsch, Face.com CEO, who declined to comment on both claims.

 

By Roi Carthy - TechCrunch on January 31,2011