Facebook this week announced is fbFund. This fund will provide capital to companies and individuals interested in building applications for the "facebook economy".
Facebook is taking out its checkbook and joint venturing with Accel Partners to offer "micro" or "angel" investments. The interesting part is that to avoid conflict of interest or future "non-compete" or "confidentiality" issues, Facebook is not taking equity in any of these companies.
The upside for Facebook is that these applications will cause more "stickyness" to its site, more pageviews and attraction of specialized niches.
The only risk for the developer of the application will be the natural tendency of facebook to find these great ideas and begin to develop them for themselves. Some companies will be fortunate and eventually may be purchased by facebook, others who don't have much intellectual property protections, may be out of luck if and when facebook incorporates those features directly into its applications.
I personally saw this close up for years in the world of ACT! contact management. Small companies would develop products and addons, only to see some of their ideas in corporated in the next release of ACT!. Like any speculative endeavor, there are risks and rewards.
However, since facebook is fronting this money, the risks are lower and seems like a good win-win situation. Join the facebook goldrush.
Sunday, September 23, 2007
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