TELECOM Digest OnLine - Sorted: Facebook Innovators Win Funding, Settle for Jobs

Facebook Innovators Win Funding, Settle for Jobs

Eric Auchard, Reuters (
Wed, 11 Jul 2007 23:33:41 -0500

By Eric Auchard

First came the dot-com gold miners. For those who stayed on after the
bust, there was still some silver to be found. But for latecomers and
recent graduates seeking to cash in on the latest Silicon Valley
craze, it's mostly decent paid salary work that's left.

The going rate for a hit new product from a talented programmer on
social networking sensation Facebook is tens of thousands of dollars,
a plane ticket to California, and a job.

Facebook, which allows users to share their online activities with a
circle of friends, is seeing some of the first successful products
snapped up by venture capital backers or in outright acquisition

Yet it's a far cry from the tens of millions of dollars venture
capitalists dished out nearly a decade ago in the dot-com start-up
craze, or the hundreds of thousands in seed money with which Web
entrepreneurs have had to learn to build businesses since then.

Instead, companies looking to cash in on the excitement over Facebook
-- where successful programs can attract millions of users in a matter
of days -- are acting more like aggressive college job recruiters
handing out generous signing bonuses.

"There's this giant competition for brilliant young developers," said
Max Levchin, founder and chief executive of San Francisco software
developer Slide Inc. "Facebook is this instant leader board of who's
best at user engagement and technical ability."

In May, Facebook began allowing independent software makers to build
applications in the site, a move that has led to the creation of more
than 1,700 new applications in less than two months and sparked a
surge in usage among Facebook members.

Applications range from those that share your favorite music videos,
albums and television shows with friends to one that sends text
messages to mobile phones through Facebook.

Slide said on Tuesday it had acquired
SuperPoke, one of the 10-most-popular programs on Facebook, and hired
the three-student team behind it.

Also this week, Menlo Park, California-based Bay Partners said it had
created AppFactory, a program to fund "tens" of different Facebook
application projects using a fast-track approval process and grants
ranging from $25,000 to $250,000.

"Bay wants to find the killer apps, whatever they may be," said Salil
Deshpande, a partner in the early-stage venture capital firm.


Bay said it was betting on individuals or small teams and their
concepts, and moving fast to capitalize on demand -- rather than the
classic venture capital approach of building companies with stable
track records over many years.

In late June, Slide hired the creator of "Favorite Peeps," a simple
program with 1.6 million users already that lets Facebook members show
off pictures of their closest friends.

"That really opened us up to the caliber of people you could meet
through this filter of watching who was building successful Facebook
applications," CEO Levchin said. Levchin co-founded online payments
leader PayPal Inc. in 1998 and sold it to online auctioneer eBay
Inc. in 2002.

Terms for Favorite Peeps were undisclosed but Spongewire, a review
site that tracks new Facebook programs, reported that Slide paid
$60,000 and hired its creator, Dennis Rakhamimov, a Columbia
University graduate now working in San Francisco.

Slide, a 50-employee company, is the leading creator of mini-programs
known as "widgets" -- simple software used by members of social
networks like MySpace and Facebook to express themselves or add
features to their personal Web pages.

Slide's acquisition, SuperPoke, is a humorous software application
that allows users to define their current standing with friends on
Facebook. The application has signed up 3.8 million users.

SuperPoke encourages users to virtually "slap, bite, chest bump,
dropkick ... or headbutt" friends. It was created by two Stanford
University graduates -- William Liu, 26, and Jonathan Hsu, 28 -- who
collaborated with a recent University of California, San Diego
undergraduate, Nik Gandhy, who is 24.

Copyright 2007 Reuters Limited.

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