There is no getting away from Facebook: everyone is talking about it on the email lists, on the blogs, in the restaurants. Even grownups are happily confessing their addiction to the Silicon Valley's own Furby. What is more amusing is that seemingly clever guardians of wealth are getting caught up in the euphoria and loosening their purse strings.
Take Bay Partners as an example. A sedate venture fund that typically invests in semiconductor companies and infrastructure start-ups has started a new effort that invests exclusively in Facebook applications. The right applicants can get anywhere from $25,000 to $250,000 as an investment for their applications.
The collateral of this project, imaginatively dubbed App Factory, is interesting, cringe-worthy reading filled with clichés like "application entrepreneurs" and "affect adoption, virality, and usage." Here is just a nugget of wisdom from the press release announcing this new funding strategy.
A fully baked business model is also not a requirement, as long as there are reasonable theories and approaches that can be explored together.
Putting my newly acquired Hebrew Yiddish skills to use, I say, Oy-vey!
Facebook, despite the cleverness of its recent platform strategy, is still a start-up, and a funding vehicle focused entirely on its ecosystem seems a bit rash. There is still a fog around these Facebook apps-as-businesses. Advertising on social networks is still a hit-and-a-miss phenomenon, still heavily reliant on banner advertising than anything else.Sure some Facebook apps have been acquired by other start-ups, like Favorite Peeps bought by Slide, but there is less to this land grab than meets the eye. Travel-focused vertical search engine, SideStep recently snapped up Extended Info, which has nothing to do with travel.
Rob Solomon, CEO of Sidestep told Liz earlier today "Trey Philips, the guy who built it, hacked it together at the facebook event. He's a talented young guy who understands these social networks."However, since Phillips is still in school, Sidestep hired him as a summer intern who is basically advising them on building Facebook stuff. As I said earlier, there is fog of confusion.
But Bay Partners (via the press release) rationalizes its decision by saying that since Facebook is a Social OS , it is an opportunity to develop in the marketplace and ecosystem around it.
They are partially right, except for the fact that this OS is inward looking: people work on Facebook's terms, and not the other way around. Last time an inward looking ecosystem caught the imagination of developers, it was Windows 95, the defining moment for Microsoft.
The winner of that movement: Microsoft.
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Online ecommerce was over 
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