Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo


Unsupported browser: Your browser does not meet modern web standards. See how it scores »

{ action.text }

Sarnoff, of course, was tracking these activities from afar. But he needed a closer look. To get one, he hired a fellow Russian immigrant named Vladimir Kosmo Zworykin, head of television research and development at Westinghouse in Pittsburgh. Zworykin had been working on television for years. He filed for a theoretical patent on such a system as early as 1923-still pending seven years later-even though he had no working model. Farnsworth had applied for two key patents of his own; Zworykin had already been in touch with him about visiting the San Francisco laboratory. By then, Farnsworth’s financial backers were putting pressure on him to sell the whole company-rather than just a license-to Westinghouse. After all, the stock market had recently crashed and burned.

“The bankers all wanted to cash out,” recalls Pem Farnsworth, now 92 years old and living with her son, Kent Farnsworth, and his family in a small house in Fort Wayne, Ind. No stay-at-home wife, Pem had worked along with her brother Cliff on her husband’s small lab staff. Despite the fact that these events took place some 70 years ago, her recollections seem sharp, especially when it comes to the colossal battles with Sarnoff.

“Dr. Zworykin was there for three days, and he saw everything,” Farnsworth’s widow says of that visit to the Green Street lab in April of 1930. Her husband even built an “image dissector,” essentially the first electronic television camera, right before his guest’s eyes. Farnsworth agreed to host the visit because he had hoped Westinghouse might license his patents for a substantial amount of money. Pem Farnsworth maintains that her husband didn’t realize the full extent to which Sarnoff and Zworykin were already collaborating.

Zworykin returned immediately to RCA’s Camden, N.J., labs and began trying to reverse-engineer what he had seen at Green Street. Apparently confident he was backing the right guy, Sarnoff gave his new employee a $100,000 budget-many times greater than all the money Farnsworth had been able to raise-and a one-year deadline to develop a working electronic television system. But despite all Zworykin’s knowledge and experience, the year came and went without much to show for it.

Frustrated by the lack of progress, Sarnoff decided to fly across the country and pay a surprise visit to the Farnsworth lab himself. It was April of 1931, and the RCA antitrust case had been droning on in Washington for months, making this trip all the more audacious. “At this point, RCA is in chaos,” says Alex Magoun, director of the David Sarnoff Collection, an archive of historical documents, in Princeton, N.J. “Radio and phonograph sales were plunging. The Depression led to a price war and the $10 radio. The government forced RCA to slash its licensing fees. And RCA’s stock lost more than 90 percent of its value. Sarnoff had this financial desperation. He was probably thinking, ‘I’m going to buy this Farnsworth guy.’”

When Sarnoff arrived at 202 Green St., Farnsworth happened to be out of town on business. The door was answered by George Everson, a philanthropist who had several years earlier become the first backer of the Farnsworth Radio & Television Company. Everson proceeded to show Sarnoff around and had the engineers conduct a special demonstration. At the end of the visit, Sarnoff expressed confidence that he could build TVs without infringing on Farnsworth’s patents and that there was nothing here that he needed, according to Everson’s written account. But shortly thereafter, Sarnoff offered $100,000 to buy the company outright. Under the terms, Sarnoff would own Farnsworth’s television patents, now formally granted, and Farnsworth would come to work for RCA. The episode portended a remarkably similar Microsoft visit to Netscape in 1995, in which top executives from Redmond allegedly threatened actions that could put the startup out of business unless it cooperated.

When Farnsworth received word of the deal by telegram, he rejected it. And despite the fact that bankers were looking for an exit, they agreed that the lowball offer was an insult. “The bankers were pretty dim,” remarks Kent Farnsworth. “But even they could see more than a hundred grand in television.”

0 comments about this story. Start the discussion »

Tagged: Business

Reprints and Permissions | Send feedback to the editor

From the Archives


Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me