Facebook is launching a $10 million fund to invest in third-party applications that rely on the company’s developer platform.
Some angel investors and venture capitalists have already committed money to funding companies that rely on Facebook’s platform. This move shows Facebook and its investors want to build out its following among top developers even as other large web companies are busy with their social networking and developer platform efforts.
Facebook’s developer fund will pay out $25,000-$250,000 grants, which require that the recipient build their company on the platform. Recipients must not have taken previous venture backing.
Yahoo opened up a private beta to its own social network over the weekend. Widgets developers are speculating with us about when other social networks, such as Myspace and Bebo, will give more access to outside developers; this fall?
The fund announcement comes on top of news that Facebook may also be providing data storage services for applications — a need currently filled by other storage service providers, such as Amazon’s S3.
The “investment committee” in charge of selecting grant winners includes founder and chief executive Mark Zuckerberg and marketing vice president Chamath Palihapitiya. Facebook board members Jim Breyer of Accel Partners and Peter Thiel of The Founders Fund will also serve on the committee; their respective firms will provide the funding, initially $10 million.
These firms will also get the first chance to provide additional funding, but grant recipients will otherwise not have to take on any debt or give up equity.
The fund is meant, in part, to inspire other venture capitalists to invest in Facebook-based companies, Facebook says.
An advisory council will screen applications before sending them to the committee. It includes Reid Hoffman, founder and chairman of LinkedIn (and an early Facebook investor), Josh Koppelman of First Round Capital, and Rajeev Motwani, a Stanford computer science professor and early Google backer.
Interested person can email platform@facebook.com with their business plans. Responses may take up to a month.
For thoughts on social networking platforms as a business, read Marc Andreessen’s blog post and ReadWriteWeb’s followup.
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