Software developers compete on Facebook

Facebook has created a
free-for-all for software
developers.

LOS ANGELES TIMES

SAN FRANCISCO — Mark Pincus might hold a winning hand with his latest Internet venture.

More than 130,000 Facebook.com users a day play an online version of Texas Hold ’Em that the San Francisco entrepreneur created at his kitchen table.

This is not the poker of smoky backrooms or illicit gambling sites but a free, friendly game at one of the Internet’s hottest hangouts, Facebook. Chips serve as social currency: The more you win, the bigger the swagger. Run low and you can earn more by inviting chums to join.

Welcome to the emerging Facebook economy.

Software developers have built more than 3,000 programs to run on the popular social networking site in the past three months. The uses range from the practical, such as buying music or scouting vacation spots, to the quirky, including sending virtual cocktails.

About 80 percent of Facebook’s 40 million users have added at least one feature to their profiles. The most successful applications claim millions of users.

“Facebook is God’s gift to developers,” said Lee Lorenzen, founder of Altura Ventures, a Monterey investment company that started betting exclusively on companies creating Facebook programs in July. “Never has the path from a good idea to millions of users been shorter.”

The Facebook free-for-all began in May, when the Palo Alto company invited hundreds of software developers to build their own features for the site and pocket the proceeds. The strategy triggered a digital land rush, with 80,000 developers signing up. They all wanted a shot at the desirably youthful demographic of Facebook users, many of whom spend hours a day on the site.

Now entrepreneurs wanting to start companies or expand existing ones are building businesses on Facebook the way they once built businesses on the Web, except they are doing it faster and cheaper — and with a built-in audience that provides instant feedback.

RockYou.com founders Jia Shen, 27, and Lance Tokudo, 41, run a veritable Facebook factory, with more than two- dozen applications such as horoscopes and quizzes. The San Mateo start-up also formed an advertising network to help marketers and other developers draw traffic by tapping into its user base, which has reached 29 million in less than a year.