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back to article Facebook, chums splash cash at social network wannabes

Facebook, Zynga and Amazon.com formed a pact with venture capital outfit Kleiner Perkins and a brace of media outlets yesterday, in a $250m effort to fund social media startups. The group, which also includes Comcast, Liberty Media and investment bank Allen & Co, has been dubbed “sFund”. It will cough up cash, legal help and …

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Is this really about...

Looking for fresher brains? It seems to me, it is about to cultivate an environment where all sorts of companies and hidden investors and desperate entrepreneurs will jockey around to be bought by fb. This, i'm suspecting, may be to get a bead on an outside thinker group that'll shake up internal thinking. Just an initial though....

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It is really about...

... the new incumbents making sure they stay the incumbents by making sure they have irons in all the fires. Facebook was for sale at least once during its early history (apparently to Yahoo), and look how that turned out. Before one line of business declines, you must make sure you caught the next wave, before it makes you irrelevant.

Of course, we also having a new business environment, where if you are #2 or less, you might as well not be there. Yahoo was the number #2 search provider, and shareholders bitched that they weren't profitable enough, and wanted to sell. But as soon as that happened, the talent left, and they lost focus on their business, making the business even worse. So if you are #2 or less, you don't even matter anymore. Who is #2 to Facebook? No one cares. Who is #2 to Zygna? No one cares. And in the social space, it is compounded by the viral nature of social.

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