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Pity the poor Facebook-app developer. The hot social network won frothing fanboys up and down the Valley when it opened up its site to any programmer who wanted to create amusing add-ons. With MySpace actively blocking some third-party applications, Facebook looked like a hero. Now, however, the bloom is off the rose.

In an attempt to spur more applications, Facebook has started issuing grants from its fBFund to developers. A newly issued caveat: Facebook says that it reserves the right to fund competitors with similar applications, or develop lookalike applications in-house. It's a real problem; one unhappy developer says his "Shortcut" app for quickly finding friends has become, without so much as a "by your leave," a feature of Facebook's search. No surprise, really. In backing startups, Facebook is treating them much like a venture capitalist would — and VCs are infamous for refusing to sign nondisclosure agreements, or otherwise promise confidentiality.

Here's the full text of an email sent by Facebook to early grant applicants.

From: XXXXXXXXXXXXXX platform
Sent: XXX XX/XX/2007 XX:XX
To: XXXXXXXXXXX
Subject: XXXXXXXXXXXXXXXXXXXXXXXXXX

Thank you for your submission for an fbFund grant and support of the Facebook Platform. Our goal for this program is to encourage as many developers as possible to write innovative and engaging new applications on top of Facebook Platform. Additionally, we hope to enable an even broader class of developers to become entrepreneurs by giving you the financial resources necessary to pursue a new venture that relies on Facebook Platform.

During this process, however, it has become clear that we will receive proposals which contain similar or even identical ideas. As a result, and in order to protect other developers and us from claims that we or anyone else copied material without the creator's permission, unless we agree otherwise in writing, we can't promise that any materials or information you submit here will be kept confidential, or specifically that we or others might not develop similar or identical products or services. Accordingly, we ask that you not submit any materials or information you consider to be confidential or proprietary to this e-mail address.

This said, if you would like us to delete any materials you have just sent us, please send us an e-mail within 48 hours instructing us to do so with an email subject "DELETE", and we will delete those materials without review by anyone here. If we do not receive instructions to delete your materials within 48 hours, we will rely on that fact as indicating that you wish us to review your materials, with the understanding that we accept no obligations (whether of confidentiality, payment or otherwise) with respect to any materials, information or ideas included in your submission.

Again, we are very excited to be offering this program and wish you the best of luck whether or not you are an fbFund grant recipient. We can only give a limited number of grants and not getting one does not mean that we don't believe in your application nor that it can't be successful - it simply means that we have a limited amount of resources and weren't able to give money during this cycle to you. You are welcome to apply as many times as you like as each funding cycle represents a new opportunity to receive a grant. Additionally, there are other programs, if not ours, that can enable you as an entrepreneur to find the initial seed funding you are looking for.