The number of third party applications available on the popular social network Facebook has grown explosively since the Facebook developer platform was launched in May 2007. The number of available applications is currently approaching 20,000. Although the majority of these applications receive fewer than a few hundred daily active users, the four most popular applications, Super Wall (RockYou), FunWall (Slide), Top Friends (Slide) and Bumper Sticker (Independent Developers) each have over 1 million active users per day.

It is easy to dismiss these applications as silly, irrelevant and largely pointless but the huge number of people using them daily equates to a large, potentially lucrative advertising base. Venture capitalists clearly believe in the money-making capabilities of these companies. Sequoia Capital, Partech International and Lightspeed Venture Partners have all backed leading application developer RockYou. The company was founded in May 2006 and claims to have over 35 million users, serving over 180 million widget views per day in more than 200 countries. Another leading developer, San Francisco-based Slide, was founded in 2005 and raised a €34m round of funding in Q1 2008 from Fidelity Investments and T Rowe Price.

The four most popular Facebook applications, mentioned above, all have one thing in common: they were developed by US companies and/or developers. The question is, where are the European RockYou’s and Slide’s? Some of the European companies currently developing applications for Facebook include:
Playfish is a London-based social games company founded in October 2007. The company launched its first Facebook application, ‘Who has the biggest brain?’ in December 2007. Latest figures show that it is already the 50th most popular application on Facebook with 118,891 daily active users. The company has just raised €2m to develop additional products.

CoComment is a Swiss company that has developed technology that allows comments on websites and blogs to be tracked across the web and displayed in a central location. The company raised €1.1m of initial funding in Q4 2006 from Netage Capital Partners and Swisscom, and is looking to close another round of €5m in 2008. In November 2007, the company launched two Facebook applications that allow users to display and share their conversations from all over the web, within the Facebook network.

There has been a lag amongst European developers in adopting the Facebook platform. This is demonstrated by the fact that the most popular Facebook applications are developed by US-based companies and that European Facebook developers launch their applications later than their US-based counterparts.

However, European entrepreneurs have another chance to capitalise on a new, potentially revolutionary platform with the launch last week of the Apple iPhone SDK. European entrepreneurs may have an advantage over US-based developers, given their experience in mobile – particularly in developing applications for the Symbian mobile operating system. Latest Q4 2007 figures show that phones with the Symbian operating system out-sold iPhones by 10 to 1 globally. Notable European companies with experience developing on the Symbian platform include Jaiku (Finland, acquired by Google Q4 2007), Fring (Israel, €8.7m disclosed funding), MyStrands (Spain R&D, €35m disclosed funding) and Opera (Norway, €200m current market cap).

With Apple teaming up with Kleiner Perkins to set up a dedicated $100m fund for iPhone application developers around the world, and an established distribution platform for iPhone apps in the form of iTunes, Apple is generating the same kind of buzz that Facebook did when it opened its platform to third party developers. The company will also be hoping that it can translate the buzz into real user base growth just as Facebook has done. The question for European observers is how much of Kleiner Perkins $100m funding available will go towards European entrepreneurs? If European entrepreneurs can utilise their considerable mobile application development skills and experience, a large chunk of that cash could end up crossing the Atlantic.

Universal Ad, the Israel-based advertising and marketing software company, has raised $8.5m (€5.5m) in series B funding from Vertex Venture, Walden International and Western Technology Investment. Universal Ad has developed the On Demand Promotions (ODP) suite, a tool for retailers to plan and manage their promotional campaigns and marketing communications. The funding will be used to further advance the company’s technology, support new customer deployments and drive expanded sales and marketing activities.

Gigya, the Israel-based widget monetisation company, has raised $9.5m (€6.2m) in second round funding from the Mayfield Fund, Balderton Capital and First Round Capital. Gigya has developed a distribution platform for widgets, enabling visitors to add the widgets to their social network profile or blog with just one click, and the company says that its technology is used to install hundreds of thousands of widgets per day.

Electrawinds, the Belgium-based renewable energy group, has raised €20m from GIMV, Gemeentelijke Holding and The Dexia Group in the form of a subordinated loan with warrants. Electrawinds produces, sells and distributes green power generated from inexhaustible clean energy resources such as wind, sun and organic matter.

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Kidaro, the Israel-based desktop virtualisation company, is to be acquired by Microsoft. Kidaro has developed solutions to enable enterprises to exploit desktop virtualisation, presenting to their mobile and roaming users the same managed corporate infrastructure, and allowing IT to apply the same security practices employed for internal users. Microsoft will incorporate Kidaro’s technology into its Microsoft Desktop Optimization Pack for Software Assurance, a suite of desktop management tools. The deal was rumoured to be for $100m (€65.1m).

Xiam Technologies, the Ireland-based developer of wireless content targeting software, has been acquired by Qualcomm for approximately $32m (€20.9m). Xiam has developed targeting and profiling technology enabling its My Personal Offers System (MPOS) to make personalised recommendations to individual consumers based on their tastes and preferences. Xiam will become a wholly owned subsidiary of Qualcomm, which will continue to offer the MPOS as a standalone product through the subsidiary, as well as incorporating the technology into its core offerings.

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Netadmin Systems, the Sweden-based developer of network management systems, has appointed Anders Lindén as chief executive. Prior to joining Netadmin Systems, Mr Lindén was chief executive at Operax, a position he’d held for four years, and before that served as chief executive at Envox EMEA. Mr Lindén replaces Tor Borrhed, who remains with the company as chief technology officer.

CopperGate Communications, the Israel-based home networking technology company, has appointed Dr Ilan Reuven as chief scientist. Dr Reuven has more than 12 years’ experience in the broadband networking and telecommunication industries and prior to joining CopperGate was chief scientist at Comsys Communications and Signal Processing. Before this he was chief scientist at Tioga Technologies, and held a range of positions at Orckit Communications.

Mentice, the Sweden-based developer of virtual reality tools for minimally invasive surgery, has appointed James Ruscoe as chairman of the board. Mr Ruscoe serves as chief executive and board member of several Swiss private and charitable foundations, and has been an advisor to the Presidency of the European Commission on the competitive implications of innovation; to the Chairman of the European Round Table of Industrialists, Brussels; and to the Chairman of the Italian National Agency for Innovation, New Technologies and the Environment, Rome.

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Instant Discounts, the UK-based payment technology company, has informed Library House that it is currently seeking to raise between £5m and £10m (€6.5m and €13.0m) in order to fund the company’s expansion plans. The company intends to establish a call centre in the UK and is focused on expanding into Asia, with plans to establish the company in India and the Middle East. Ms Neeta Dhorajiwala, chief executive and co-founder, stated that the emerging economies in these regions will enable the company to deliver its pre-paid credit card products.

Buildersite, the UK-based online network for the construction industry, has informed Library House that, following on from recent investment used for of employing additional staff and to advance key marketing efforts, the company intends to seek £2-3m (€2.6-3.9m) funding in September/October 2008 to be used to move the company towards profitability and to fund potential international expansion. The company intends to grow rapidly in 2008 and to introduce new revenue streams.

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