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Sixteen years ago, David Bohnett founded GeoCities, a homepage-hosting website which presaged today’s blogs and social networks. Now his Baroda Ventures is backing Fabulis, a recently launched social network for gay men.

Jason Goldberg, Fabulis’s cofounder and CEO, told me that Bohnett recently agreed to invest $250,000 in Fabulis, bringing the New York-based company’s seed funding to $825,000.

Bohnett, an openly gay entrepreneur like Goldberg, has been an active venture investor since he sold GeoCities to Yahoo in 1999 for $3.6 billion. (Yahoo shut down GeoCities a year ago, after failing to capitalize on its early lead in giving ordinary Web users an online presence.) He got interested in Fabulis after using the site, according to Goldberg.

Fabulis is betting heavily on its virtual currency of “bits” as a business model. It’s currently running travel-related contests for trips to Fire Island, a popular summer destination outside New York City, and Atlantis Cruises, a gay cruise line.

Originally, Goldberg said he thought users would use bits for messaging, with users setting their own price in bits for access to their inbox. But he rapidly realized that wasn’t working, because “Facebook messaging is free.”

Instead, he’s running a massive popularity contest, where users vote each other up and bits, which sell for 1,500 a dollar and up, supercharge those votes. Prizes are awarded to people who enter a particular contest, but you can’t quite buy your way to the top. Instead, you need to make friends who then use their bits to give their votes more weight. Some are spending hundreds of dollars on bits, according to Goldberg.

Fabulis has given away $30,000 in prizes so far, Goldberg said, and users’ total spending has exceeded that amount. It’s also offering bits to users who sign up for marketing offers from advertisers like American Airlines.

Those dual revenue sources may help distinguish it from competitors like GayCities, a more established startup which recently relaunched its gay travel directory as a social network and may prove to be Fabulis’s most direct competition.

“If you can get paid on both ends, that’s a very good business,” said Goldberg.

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