Bay Partners mines for gold in Facebook, Ning takes $44 M
At least one venture capitalist is seeing gold in the Facebook Platform. Bay Partners created a new funding program, AppFactory, for Facebook Platform developers. This is venture capital with a small "v"--focusing on investments of $25,000 to $250,000 with an expedited approval process.
The goldmine for developers and Bay Partners to exploit is the 29 million or so members of the Facebook community and the development platform, which already has more than 1,400 applications. Among the top applications are iLike, which lets you personalize music selections based on your Facebook music and friends, and Slide, which lets you integrate slide shows within Facebook. At this point, monetization of Facebook apps is lagging, but Bay Partners hopes to stimulate the Facebook micro-economy.
Salil Deshpande, a partner at Bay Partners dubbed Facebook the "Social Operating System," and said that it can lead to a "a new economy which includes a marketplace of applications that are optimally designed for that platform and its user base." He is also betting that Facebook's rapid growth and success will force other social networks to align their APIs with Facebook’s.
The entrance exam for AppFactory candidates is straightforward. Bay Partners asked for a two-page or less disposition of the following items:
- A brief bio of you and your team (if applicable)
- Your vision for your Facebook Application
- How your idea adds value to the user
- Your competitive advantage
- Why it's more appropriate for your app to leverage Facebook’s platform, rather than take a destination-site approach
- Your ideas for how your app could potentially be monetized
- Your ideas for how your app will become viral
- Your capital requirements and use of proceeds
See also the blogosphere swarm on the AppFactory announcement
At the other end of the spectrum Marc Andreessen announced that after funding his social networking company Ning personally and through friends, he took in a series C round of $44 million. Ning offers a white label solution for people to build their own social networks, and so far more than 70,000 have done so. Ning makes its money selling ads on the sites. Banking $44 million in new money, Andreessen and his co-founder Gina Bianchini must has something up their sleeves that they haven't disclosed yet. See the blogosphere swarm on this one as well on TechMeme.