Facebook is not rumored to buy a Face.com-based iPhone app like you were building. They were rumored to buy Face.com-- a computer vision company that has been tweaking their face recognition algorithms for years.
What crack pipe is he smoking? He used someone else's example code to implement facial recognition (and their API too presumably) and then thinks HE would've been the one to profit, and not the algorithm makers?
he's only 14
You had a good idea, and someone took the opportunity to build it.
You'll have plenty of more ideas! Work on your programming skills and you'll be able to cash in one day. Good luck
Your app wouldn't be worth any more now than it would have anyway. They own the technology, you'd need to own a userbase worth $100m.
Facebook already has face recognition. At least, last time I uploaded an album it did. It doesn't work too well, though.
Didn't Face.com always had the auto-tagging functionality?