Launched with fanfare last year,
Facebook's fbFund has yet to cut any deals. Working with its own venture investors, Accel Partners and Founders Fund, the social networking giant originally planned to distribute up to $10 million in grants to the best Facebook application developers. Six months in, no money has been distributed. Lee Lorenzen, founder of Altura Ventures, a firm that invests only in Facebook application startups, said last week, "It's frustrating for people thinking that the money would be flowing."
That could change soon. Facebook is holding its second round of presentations today, according to Lorenzen. Facebook
launched the program September 17 in the hope of spurring even greater development of online services that are designed specifically for its social networking platform. It originally asked developers to e-mail in their ideas. Realizing that that could
open the company up to liability, it implemented a more formal submission process. Ten application developers made the final round in January, according to
Lorenzen. He said a few were
rejected, others heard nothing, but none have actually received a grant yet.
That should change today when more present their ideas in the second round. fbFund said it would provide between $25,000 and $250,000 to each grant recipient.
Still, it's not as if there aren't
hundreds of developers already working on applications. It makes me wonder what the point of the grants are in the first place. With advertising platforms in place to monetize the most popular apps and other venture capital firms such as
Bay Partners having already backed six startups focused on Facebook apps, it's unclear why Facebook and its shareholders needs to spend their own money to spur further growth of the platform. The desire to provide concrete support to the developers powering the diversity of its platform makes sense. But, I wonder if dollars are the best way to do that. Since no money has been distributed yet, maybe the company is wondering the same thing.
- Joshua Jaffe
Joshua Jaffe is general manager of TechConfidential.com.
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