Accel Partners, a longtime investor in social network Facebook, has created two new funds that add up to just over $1 billion, according to The New York Times.
One of the funds, totaling $525 million, will be used to invest in European start-ups.
But the interesting part, at least where juicy tech gossip is concerned, is the other $480 million, which is going toward a new late-stage venture fund. A few speculative bloggers have connected the dots and taken this to mean that Accel may be looking to pump more cash into Facebook.
The firm first invested in Facebook in 2005, and partner Jim Breyer sits on the social network's board of directors. With the recession starting to hit social-network ad spending, and some critics expressing concern about whether Facebook's revenue can keep pace with its wild growth, there's a legitimate question as to how effectively Facebook has battened down the hatches for the economic storm.
Raising more money would be an obvious solution, given the social network's repeated insistence that it's more important for the company to focus on expansion rather than profits for the next few years.
Facebook founder Mark Zuckerberg recently confirmed speculation that his chief financial officer, former YouTube exec Gideon Yu, has been attempting to drum up interest in more venture cash.
Accel has also invested in Glam Media, Metacafe, Etsy, BitTorrent, Trulia, Wetpaint, and a whole host of others. But Facebook, unsurprisingly, is front and center right now.
Facebook members can now vote on the second round of finalists for its FBFund seed funding competition, which will give out a total of $225,000 to five grand prize winners. The 25 companies currently in the running have already pocketed $25,000 apiece for the applications they have proposed for Facebook's third-party developer platform.
This is the second annual FBFund competition, but the first one in which members have been able to vote on their favorite apps. They can vote once per day, and can watch promotional "commercials" about what each one of them does. Voting involves installing an app called "FBFund08," which members can embed on their profiles.
The 25 finalists run the gamut from multiplayer games to college search to event planning.
Not only is the voting system a way for Facebook to promote and reward high-quality apps, but it's also a promotional strategy for Facebook to drum up more member interest in the developer platform and prove that some apps are actually worth installing. Some critics say interest is dropping, and the platform has suffered from months of negative press about "zombie bites" and other goofy apps.
Here's an interesting tidbit: The FBFund08 app was not created by Facebook, but by Wildfire, one of the app development companies in the running for an FBFund grant. Facebook effectively acquired the app from Wildfire to power the poll. But, Facebook representatives assured CNET News, that won't give Silicon Valley-based Wildfire any unfair advantages.
The $10 million initially invested in FBFund comes from Facebook investors Accel Partners and the Founders Fund.
Silicon Alley Insider editor Peter Kafka had the opportunity for some cocktail conversation with Facebook investor and board member Jim Breyer of Accel Partners on Thursday night, and he had some interesting news to report.
Most intriguing is the fact that Breyer refused to outlaw a Facebook partnership with OpenSocial, the Google-created social networking platform that's managed to steal a whole lot of Valley buzz from Facebook right as it gears up to make a major advertising announcement.
"Jim said that the company isn't philosophically opposed to what Google is trying to do, and that its business model isn't dependent on keeping its social network gated," Kafka wrote in the Alley Insider post. "He also acknowledged that users will want to be able to port their data, networks, connections, etc., from Facebook to other networks, and vice versa, and suggested that something like that may be possible within a year."
The OpenSocial logo.
(Credit: Google)If Facebook signed on to OpenSocial, plenty of critics would see it as not only a concession of defeat, but also as a sign that a social-networking brand like Facebook may be destined to remain on the level of other social media sites rather than on a par with major Web presences like Google or Yahoo.
Amid all the breathy enthusiasm over the past few months about Facebook and its potential, there was plenty of talk about when we'd start counting the Mark Zuckerberg-created social network alongside technology's serious power players. An OpenSocial partnership would, in a sense, place it among the rank and file in Google's herd.
The OpenSocial code was unleashed to developers on Thursday night.
But wait, there's more. According to Kafka, Breyer additionally rehashed the Facebook executive line that there will be no initial public offering for the company until 2009 at the earliest, and seemed to confirm that the rumored $500 million in hedge fund investments was indeed a fallacy. "The company doesn't need any more cash to fuel operations, Jim says, but would consider another raise if it was from a strategic partner," Kafka wrote.
According to an e-mail copied to the CenterNetworks blog, Facebook's much-touted developer grant program may be off to a rocky start. The FBFund initiative is apparently restructuring its application process and is asking that all previous applicants re-submit their materials. Initially, applications were to be submitted via e-mail; now, a submission form is available.
"To make sure that everyone understands the conditions of submitting a grant application, we will not review any materials you have sent via email, and any materials you may have sent have been deleted," the copy-pasted e-mail read. It's apparently to ensure that applicants know that the company "can't promise that any materials or information (they) submit here will be kept confidential, or specifically that (Facebook) or others might not develop similar or identical products or services."
Presumably, it'll also streamline the process. CenterNetworks blogger Allen Stern noted that he "couldn't imagine for a minute the management via email" and noted that if Facebook had to reorganize the process, at least the company "called a mulligan" within a few weeks of the fund's debut.
Representatives from Facebook have not yet responded to an inquiry asking to confirm the contents of the e-mail posted to CenterNetworks.
Facebook founder Mark Zuckerberg announced the FBFund incentive program at the TechCrunch40 conference last month, designed as a way to provide venture cash to developers who want to create applications for the uber-hyped Facebook Platform. With an initial $10 million flowing in from Facebook investors Accel Partners and the Founders Fund, approved developers can net from $25,000 to $250,000 to develop their apps.
I admit it, I don't know the meaning of the word fishizzle.
Russell Simmons
(Credit: Russellsimmons.com)I know it's popular with the hip-hop generation, a group that a new community site called Global Grind is pursuing. Plenty of people complain how young urban hipsters degrade the English language with their patois. I would suggest that the new venture is better off with words like fishizzle than by polluting the mother tongue with phrases like the following:
"Global Grind is a next generation start page solution that gives users the ability to aggregate content, wrap community around that content, utilize a proprietary relevance engine that 'bubbles up' relevant content based on the activity of the users and have access to curators..."
This woeful passage, found in a press release issued Wednesday by Global Grind to announce the launch of its site, not only obscures meaning but robs the Web site of any hint that it might be fun. Moreover, press releases like this remind me of Bubble 1.0. That's when dot-com companies of the late 1990s attempted to pump up their silly business plans with trendy buzzwords and jargon.
Is that what's happening with Global Grind?
Global Grind is backed by Russell Simmons, a co-founder of DefJam Recordings and one of hip hop's elder statesman, and Jim Breyer of venture capital firm Accel Partners. The site enables users to aggregate RSS feeds, podcasts, favorite videos and widgets.
There's not much here that's not offered at Facebook or MySpace. On the site's front door are a few tabs and empty video players. There's no information describing what the site does or how to use it. Apparently, this company is planning to ride its "hip hop" moniker and the pedigrees of its backers. Blah.
Or should I say: fishizzle.
Because opening up the site just wasn't enough, apparently: Facebook is branching into a new role as an investor. The company has announced a new program called FBFund to provide grants to developers who are interested in creating applications for the Facebook Platform. FBFund, with cash infused by Facebook investors Accel Partners and the Founders Fund, will start with $10 million and will provide $25,000-$250,000 grants to developers who apply for the program. The fund's investment committee will consist of Facebook founder Mark Zuckerberg, vice president of product marketing and operations Charmath Palihapitaya, and board members Jim Breyer of Accel Partners and Peter Thiel of the Founders Fund.
The big requirement: the developer in question, who may be an individual or company, may not have raised prior formal venture funding. No equity or debt will be associated with participating developers, and the only major condition (at least for now) is that the money awarded must be used to develop the company in question on the Facebook Platform.
A release from the company explained the FBFund program: "By decreasing the barrier to start a company, we hope to entice an even larger group of people to become entrepreneurs and build a compelling business on Facebook Platform. We hope this is also a funding model that other venture capitalists will follow."
An advisory council, with members including LinkedIn founder and chairman Reid Hoffman, First Round Capital founder Josh Koppelman, and Stanford University computer science professor Rajeev Motwani, will oversee the application and approval process. (Stanford, as you may recall from last week's news, has created an entire class based around the development of Facebook Platform applications, but Motwani does not appear to be affiliated with it.) No formal site has been created for FBFund, but interested applicants are now encouraged to mail their business plans to platform@facebook.com.
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