Two further signs of just how far the lure of social networking is prompting venture capitalists to loosen the purse strings:
Ning, Marc Andreessen’s social networking platform, has just raised $44m from mutual fund group Legg Mason and others (are mutual fund companies getting into social networking now?) Andreessen had been following the low-key style favoured by the early Web 2.0 crowd but has now decided the time has come to push the pedal to the metal.
According to this note on his blog, Andreessen had been staying "lean and focused" but now it’s time for phase two: scaling up the platform, investing in new features and "platform evangelism and support programs." Just in case you thought that meant Andreesen is ready to swing for the fences, dotcom-style, he adds that in other respects "we plan on staying as lean and focused as we possibly can." Hm.
Meanwhile Bay Partners, a Silicon Valley venture capital firm, says it wants to invest money in companies that are writing applications to run on the Facebook platform. The social networking site’s platform strategy has been one of the Valley’s favourite talking points since it was officially launched in May. First it was hailed as an end-run around MySpace, a way to draw more innovation, and eventually users, to the underdog network. That was followed by an inevitable, if rather rapid, backlash as the tech blogs started to question whether Facebook’s platform is all it’s cracked up to be (we blogged about what the blogs were saying here.)
In reality, it’s too early to assess the Facebook strategy because (a) it’s not clear what the business model for the apps will be and (b) how big a slice of the cake Facebook will want to keep for itself when/if the dollars start to flow. Interesting, though, that Bay Partners wants to invest $25,000-250,000 in apps to run on the network, no business model required – only "reasonable theories about monetisation."
Not that this gets us back to the Sock Puppet days quite yet. Still, it’s another step along the road.
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