There’s lots of skepticism out there about stodgy venture-capital fund Bay Partners creating a special investment vehicle for Facebook apps, called AppFactory. Om’s post is entitled “Bonkers By The Bay,” which pretty much sums up his point of view on the idea — that it’s a dumb move by a VC firm that has been swept up in the Facebook hysteria, and that it’s dumb in part because it means building a business on a proprietary platform.

Others are similarly skeptical — Ashkan Karbasfrooshan of HipMojo, for example, can barely contain his derision for the idea. And the biggest criticism centers around whether Facebook apps are monetizable at all, something that venture capitalist Andrew Chen talked about in very skeptical terms in a recent interview with Inside Facebook. But Mike Arrington, who has no small amount of experience in the startup game himself, seems to think that building apps based on the Facebook platform isn’t such a bad idea at all, since it allows a startup to build and test something relatively quickly and cheaply (the guy behind the Bay venture, Salil Deshpande, responds multiple times in Mike’s comments).

For what it’s worth, I think Bay Partners is making a smart move. We’re talking about a relative pipsqueak of a fund in dollar terms — up to fifty investments worth $25,000 to $250,000 (but most likely far less). That’s pretty close to a rounding error in VC terms. Will any of them work out? Who knows. But it’s possible that one or two could become something real, using Facebook as a springboard, and that seems like a small chance worth taking, along the lines of what Google Ventures and Y Combinator are doing.

AppFactory Backing Facebook Platform Builders

Silicon Valley venture capital firm Bay Partners has opened its AppFactory program to provide fast-track funding to developers working on Facebook Platform. Developers, Bay Partners wants to help if you have an application to build on Facebook Platform. Their newly opened AppFactory program will deliver funding from $25,000 to $250,000 to promising entrepreneurs.

By providing the AppFactory service, Bay feels it can get promising projects onto a fast track toward developing a finished product. A well-crafted application that gains traction with Facebook users could be the core of a new business.

“The creation of an operating system, or a platform, has always led to a new economy which includes a marketplace of applications that are optimally designed for that platform and its user base,” said Bay partner Salil Deshpande in a statement. “Bay wants to find the killer apps.”

If they do find those applications, the return on one that becomes widely-adopted will look very promising. Facebook has a userbase that Bay pegs in the range of 29 million. If someone could grab one-tenth of one percent of those users, that’s a nice base of some 29,000 people upon which to build.

Tags: AppFactory