Accel Europe, the London-based arm of venture-capital firm Accel Partners, is attempting to raise hundreds of millions of dollars for a new fund. The effort will likely succeed, given Accel's brand name; its investment in Facebook has given Accel new cachet. One thing I'd love to know how the partners explain to potential investors: Why they have a convicted criminal in their midst.The firm's partners continue to back Kaj-Erik Relander, the former CEO of Sonera, who left the Finnish telecom firm abruptly in 2001 to join Accel. His downfall is Europe's own version of the HP pretexting scandal: He was charged with illegally using Sonera's network to monitor employees' and reporters' phone calls, in an effort to find leaks. Relander was convicted and given a suspended sentence. The last time Accel Europe raised money in 2005, the case was under appeal — a reasonable defense for Accel's support of Relander. But a court denied his appeal last year. What's Accel's excuse now? A commenter on TheFunded.com suggests Relander's questionable ethics are reflective of Accel's entire European branch, accusing the firm of backing shady startups. Whether such charges are true or not, they show why Accel's bullheaded defense of Relander is risky for the firm's reputation. Relander committed a crime. He was convicted of it. And now, Accel wants to give him more money to handle.

Facebook announced it will pay out $2 million to winners of its second fbFund developers' competition. 25 first-round winners will get $25,000 each, and five second-round winners will win $250,000. The money comes as a grant, not an investment, with the only stipulation being that Facebook backers Accel and Peter Thiel's Founders Fund get the right of first refusal for any investment rounds in the future.Last fall, Microsoft paid $240 million for 1.6 percent of Facebook, along with an advertising deal. That wasn't because it was a popular social network, but because the tech press was talking up Facebook as a platform for social applications — a Windows for widgets. Facebook's platform has fallen far short of that promise. The successful apps widgetmakers created in the first year of the platform's existence succeeded through spammy viral tactics, not by being particularly useful or fun for Facebook users. Social-games maker Zynga, for example, makes its games easier to win for users who invite their friends to play. Facebook began changing its platform rules to discourage such tactics in January. This summer, it brought out the stick, suspending popular applications like Top Friends for violations. Now comes the carrot, in the form of the fbFund. To taste Facebook's cash, developers must meet a specific set of criteria from Facebook. We've translated them from PR-speak below. Facebook's criteria:

Yahoos are still buzzing about Jeff Weiner's departure for the world of venture capital. Before he left, many of his coworkers thought he was a shoo-in for a CEO gig at Facebook. Now that he's an entrepreneur-in-residence jointly at Accel Partners and Greylock Partners — both investors in Facebook — the conspiracy theorists have changed their patter: Weiner's just in a holding pen until Accel and Greylock can boot founder Mark Zuckerberg, install Weiner as CEO, and take the company public. "Zuck is definitely out ... it's just a matter of time. It's clear as day," one tipster writes. Clear as mud, rather. It makes sense that Yahoos, bitter at Facebook's success and eager to have one of their own deliver a comeuppance to Zuckerberg, would be circulating this rumor. But here's what they don't know about Jeff Weiner and Mark Zuckerberg.

As expected, Yahoo content chief Jeff Weiner has left the troubled firm to serve as an "entrepreneur-in-residence" — read: wannabe CEO of an as-yet-undisclosed startup — at Accel Partners and Greylock. Working at two VC firms is unusual, but both have invested together in companies such as Facebook. [Accel Partners]

Adam D'Angelo's departure "broke my heart," one Facebook insider told us. But Facebook's backers are shedding no tears. We hear that both Peter Thiel's Founders Fund and Accel Partners are considering D'Angelo for an entrepreneur-in-residence role — a sinecure venture capital firms offer Valley executives while they're looking for a new startup idea. He's also talking to Google, which is surely eager to reverse the flow of its employees to Facebook.

Fortune magazine, ever servile, provides a ready platform for the powerful with something to say. The latest on stage: Jim Breyer, the Accel Partners VC with a seat on Facebook's board. Breyer has a fair point: We may be seeing the cyclical bursting of another Silicon Valley bubble. Breyer says this happens once every seven years, roughly. But his timing is suspicious. Last October, Breyer gladly took Microsoft's bubbly $240 million for a microscopic stake in Facebook. Declaring the bursting of a bubble now may help hasten its advent, and in the process, make it harder for Facebook's rivals to raise money. But for Fortune readers' tech-stock portfolios, an early warning might have been more useful. Why didn't the magazine ring him up last fall? Fortune never mentions this. (Illustration by Sean McCabe for Fortune)

Microsoft will acquire San Francisco-based Rapt, which helps publishers manage their ad inventory. VCs Kip Sheeline of Levensohn Venture Partners and Arthur Patterson of Accel Partners saw their firms cash out on the deal, along with cofounder and CEO Tom Chavez. But not without a little founder blood on their hands.

Travel search engines Kayak and Sidestep will merge to form a new company, according to reports. As part of the deal, Kayak raised another $196 million from current investors Sequoia Capital, General Catalyst Partners and Accel Partners as well as from Sidestep investors Norwest Venture Partners and Trident Capital and new investors Oak Investment Partners and Lehman Brothers Venture Partners. The merger will create the fifth largest online travel destination. That sad boast might make you wonder, how'd they get so many VCs on board?

CONFONZ AT THE WEB 2.0 SUMMIT — While the rest of the world prepares for Halloween, there was a significantly scarier sight on display yesterday at the Palace Hotel. You truly know the web 2.0 "revolution" is over when the suits outnumber the geeks. Granted, the Palace isn't exactly a geek haven. And the pricing of badges for the conference is certainly out of the range of most of your average Web coders. But it's easily within the grasp of venture capitalists, marketing weenies, and CEOs. And that's just who attended this, the second Web 2.0 conference of the year.

Back in July, I speculated that Accel Partners VC Jim Breyer might use his position on the Facebook board to strongarm startups developing Facebook apps into taking its money. And sure enough, he's setting up a new fund to do exactly that. But he's cleverly cutting in Facebook itself, as well as fellow board member Peter Thiel's Founders Fund. Facebook CEO Mark Zuckerberg announced at TechCrunch40 that his company and its two main backers are forming fbFund, a $10 million pool of money that will invest between $25,000 and $250,000 in Facebook-app startups. As hard to resist as a solo offer from Breyer might be, a check offered by Breyer, Thiel, and Zuckerberg seems irresistible. And more than a little menacing.

Would Cambridge-founded social network Facebook have grown into its current role as tech media darling if it had stayed back east instead of seeking its fortune in California, wonders Boston.com? Answer, as supplied by Facebook investor Jim Breyer from Accel Partners: No. As in N-O. No effing way. Nada, etc. Why? Breyer elaborates: ""So many of the Facebook employees have come from top Internet companies like Yahoo, eBay, and Google that the culture that has been built at Facebook is fundamentally more consumer/Internet savvy than if it would've been built anywhere else on the planet." Sounds plausible to us! But bitterly jealous Battery Ventures partner Scott Tobin—who passed when Zuckerberg came to him for startup money— has a different take. "Folks in the Valley are incredibly ego-centric to a point of snobbery" he blithely claims. True enough. But, he goes on to say, passing on Facebook "may turn out to have been a mistake."

Everyone's still talking about Henry Blodget's facile guess on his Internet Outsider blog that Microsoft might offer $6 billion for Facebook, the social network of the moment. And Facebook investor Jim Breyer, the Accel Partners venture capitalist who's on Facebook's board, tried to stoke hopes for such an outsized valuation by casually mentioning at Fortune's iMeme conference that Facebook was on track to do $100 million in revenues and turn an operating profit, by some financial measures, this year. But you shouldn't buy Blodget's musings, or Breyer's shilling, for a moment. Here's why.

Kara Swisher doubts Accel Partners' Jim Breyer has the guts to put the squeeze on Facebook app developers: "My 5-year-old son could handily best the doe-eyed VC in a fair fight." [AllThingsD.com]