Here's a worthy contrarian to pop the bubble in Facebook bears. In 2003, former Wall Street analyst Lise Buyer wrote Google CEO Eric Schmidt and founders Larry Page and Sergey Brin a note reading: “I don’t know if you’ll ever want to go public but I bet that, having been on the other side of the table, I could be helpful to you if so.” Now, four years after Schmidt, Page and Brin said yes and Buyer helped take Google public in 2004, she's got the same message for Facebook. "To be candid," Buyer told Private Equity HUB, "I’d love to work with them." She said why:

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:

At a recent company meeting, management told LinkedIn employees they would soon be allowed to sell as much as 20 percent of their vested options at a $500 million valuation. Word leaked yesterday that Facebook plans to allow its employees to do the same. Both LinkedIn founder Reid Hoffman and Facebook founder Mark Zuckerberg want to take their companies public — and thereby get their employees paid — but it won't happen soon. LinkedIn expects to earn about $100 million in 2008, but VentureBeat reports that bankers want to see that number hit $200 million before bothering to file papers. The public markets aren't hungry enough for anything less. In July, only 56 companies went public, raising $5.6 billion in their IPOs. During the same month last year, 190 companies raised $31.7 billion on their initial foray into the public markets.

Skanky-chic clothing retailer American Apparel reached nearly 48.9 million unique Web surfers with 489 million display ad vews in the month of April according to ComScore, with 24 percent of those impressions being garnered on MySpace, 19 percent on Facebook, and another 12 percent on AOL's banner-laden AIM software client. The ads have stirred controversy for the prurient use of Helvetica. How's it affecting the bottom line?The company raked in $111 million last quarter, a 50 percent increase year over year — though the company's bookkeeping is notoriously unreliable, the share price is down to an all-time low, and a fifth sexual harassment suit is still pending against visionary pervert Dov Charney, founder and CEO. That explains why American Apparel is so happy to advertise on the social networks that frighten more staid brands: The rates are cheap, and the company doesn't have to worry about tarnishing its reputation.

Stock options are meant to encourage employees to stay. But Facebook's skyrocketing valuation has created a perverse incentive: It actually encourages employees to quit. That's because ex-employees can sell their shares at any time, while employees have had to seek permission directly from CEO Mark Zuckerberg, who frowns on insiders cashing out. (Never mind that he sold $1 million in shares early in the company's history.) Facebook has created a program that lets employees sell up to 20 percent of their vested shares. A Twitter by Facebook employee Eston Bond asking for advice on selling restricted shares suggests it's already in effect.

MyYearbook, a social network for teens turned off by the old people thronging Facebook and MySpace, has raised an additional $13 million in venture capital. The social-network startup wooed by Barry Diller's IAC last year, but a deal never happened. The site claims to be the third biggest social network in the U.S.

BarackBook is the Republican National Committee's new faux-cial network. As a campaign tool, it's supposed to make clear the connections between Obama and his "questionable" friends, like "60's Radicals!" William Ayers of the Weather Underground and Marilyn Katz of the Students for a Democratic Society. They have cute profile photos, sure, but where are the Last Night's Party-style gossip shots of Obama circa 1968 in a Mao baby tee? Users can send a donation to the GOP; they cannot send John McCain a Friends-for-Sale request.

According to a Facebook spokesmonkey, "In response to a legal request from Hasbro, the copyright and trademark holder for Scrabble in the U.S. and Canada, the developers of Scrabulous have suspended their application in the U.S. and Canada until further notice." Let me help you with that blog post you're writing in your head: First they came for the Scrabulous players ... [CNET]

Now you have one less way to waste time at work and one less reason to get pissed off at your "friends." Scrabulous—the Scrabble rip-off available for online play at Facebook—has finally been shut down. So now you have to play real, Hasbro-owned Scrabble. Or just go here. This is perhaps not the best environment in which to launch our own exciting murder mystery online board game "Hint", is it. [NYT]

The not-so-subtle thesis of a Boston Globe profile of Cameron and Tyler Winklevoss, the twins who claim Mark Zuckerberg stole the idea from Facebook from them: They're not just dumb jocks. The Twinklevosses, as they're known in Silicon Valley, lost in their legal effort, but are hoping to win at the Beijing Olympics, where they are competing in rowing. They and fellow cofounder Divya Narendra settled with Facebook, agreeing to sell ConnectU for shares in the company — but are now trying to overturn that agreement, saying Facebook isn't worth as much as they thought. That argues strongly against the piece's attempt to bust stereotypes.One would think they would have gotten a proper valuation on the shares before agreeing to take them as payment. That in itself suggests that the twins, who majored in economics at Harvard, weren't paying attention in class. And if they have some other evidence of brains, it wasn't on display for the Globe. Their coash, Ted Nash, tries to argue that they're just strong, silent types: "Inside, everything's working all the time with them. What you see isn't what you get." What you see, according to the Globe:

The British knife crime epidemic has gone virtual! Are your kids safe when they go online-safe from knives? No! Not while Facebook was condoning the existence of a "SuperPoke" application that allowed thuggish social networkers to "Shank" their friends. Thank god the UK tabloids have hollered enough to ensure that none of our children will be virtually shanked again! The Sun is outraged. In London there have been 21 teen knife murders this year! That's the average total from a single LA house party gone wrong, but no matter. The manufacturer of SuperPoke, Slide, has pulled the application, and these digital knife-pokings have been stopped. Should everyone now go to jail?

Why did I let Jackson West take a vacation? While our associate editor was away, we actually wrote something nice about Gavin Newsom — and he only had to save San Francisco from a rogue IT guy to do it! Microsoft's Windows chief, Kevin Johnson, ended up in Sunnyvale, Calif. — but not, as he'd hoped, in the corner office at Yahoo HQ. Facebook CEO Mark Zuckerberg flubbed more media interviews this week, prompting us to suggest he get help. Maybe he could take tips from the Internet-famous Julia Allison, who crashed his developers' conference?Allison's sort-of ex, Digg cofounder Kevin Rose, said he was buying Google. Surely not for Knol, Google's weak attempt at taking on Wikipedia — at launch, its search engine didn't even work. Jackson, come back and help us make sense of this crazy business! (Photo by Jason Calacanis)

David Sze, the Greylock Partners venture capitalist, may lose his observer status on Facebook's board — which will make for a lot of quiet moments at parties. Tragic: Sze will have to talk up his Digg board seat instead. [BoomTown]

After Mark Zuckerberg's awkward Lesley Stahl interview on 60 Minutes, after his infamous SXSW keynote with Sarah Lacy and, finally, after yesterday's halting CNBC interview, it's time the poor suffering Facebook CEO got some help. Getting a copy of Marc Segar's "Coping: A Survival Guide for People with Asperger Syndrome and pointing out the relevant bits might do the trick. Even brassy Facebook COO Sheryl Sandberg isn't gutsy enough for the job, we're betting, so we will. To be sure, we're not doctors. We don't know if Zuckerberg has Asperger's. But experts would agree, his obvious brilliance is as much a symptom as his inability to hold a conversation. And the advice below would seem to apply whether or not the diagnosis does.

Social networking phenomenon Facebook, everyone's favorite online poke-orgy, was quickly adopted by Hollywood types. As such, buried inside its various features—its Status Updates, its "Wall-to-Wall" graffiti nonsense—there are thousands of showbiz stories just waiting to be discovered. We think of College Road Trip director Roger Kumble, who admitted he was "trying not to hit refresh on Rotten Tomatoes" the day reviews came out accompanied by their dreaded green splat. In that vein, we bring you a screengrab fresh off the home page of comic Orny Adams, best known for being the younger, hungrier ying to Jerry Seinfeld's richer-than-God yang in the stand-up doc Comedian. His status updates—one at 8:12 a.m., the next 6:50 p.m.—tell a whole Hollywood story unto themselves:

Maybe Facebook's hackathon wasn't an all-nighter like founder Mark Zuckerberg prefers, but that didn't stop Facebook hotties Brandee Barker, Caitlin O'Farrell, Kathleen Loughlin and Raquel DiSabatino from enjoying themselves on stage with Thievery Corporation. Apparently, the crowd enjoyed them on stage too. "So awesome," commented Facebook's Dave Morin, despite being very taken by Google's Brittany Bohnet. Here's what we want to know about the video: Where's Sheryl Sandberg? What, mama don't dance no more? We hear her team insisted she wear jeans to the event, a fashion move the buttoned-up Sandberg almost never makes. But dancing must have been a step too far.

Matthew Firsht, managing director of Applause Store Productions, which finds audiences for television and radio shows, won the equivalent of $33,000 in damages against a former schoolfriend. Grant Raphael's profile for Firsht falsely suggested was looking for same-sex relationships and was signed up with groups including Gay in the Wood…Borehamwood and Gay Jews in London. The judge awarded Firsht $29,500 for libel and $4,000 for breach of privacy. Firsht's firm was awarded $10,000 for libel. [Guardian]

If you can stand it, it's worth watching a particular excerpt from CNBC's interview with Facebook CEO Mark Zuckerberg twice. First watch the version CNBC put on the air, embedded above. In that clip, Zuckerberg answers a question sounding sure of himself, speaking in clear, declarative sentences, and smoothly using his talking points, not just rattling them off. Compare it to the clip below of Zuckerberg answering the same question in an unedited version of the interview CNBC reporter Julia Boorstin embedded on her blog. The difference shows CNBC editors' talents — and just how far Zuckerberg has to go before it's safe to put a microphone near him. It all goes downhill after Zuckerberg begins to answer a straightforward softball from Boorstin — "What is the new site design and what does it mean for the user experience?" — by saying, "So for those of you who don't know, I, we just announced, um and launched, started rolling a new site design."

Widgetmakers think they have it tough complying with Facebook's changing rules and secret motives, but that's probably because they haven't had to deal with Apple yet. Lucky them. Now they do. Facebook executive Ben Ling announced yesterday at F8 that Facebook Connect — Facebook's initiative to weave activity on other websites into its site — will launch on the iPhone later this fall.InsideFacebook's Justin Smith says Facebook's third-party developers have been "clamoring" for access to Facebook's mobile platform, but we wonder if they know what kind of headache they're getting into. Not only is Apple secretive to the extreme about upcoming changes to its iPhone apps platform, it forces developers to keep quiet. Apple requires an NDA for "every single developer working on the platform — and every single person who installs the iPhone developer's kit" — greatly limiting any kind of help coders can be to each other when creating new apps.

For the wealthy and famous, suing people on the Internet is like the new Kabbalah, not just in terms of trendiness but also geographical focus. Britain is the hot destination if you want to take a blogger's house away because our cousins across the way have got the same draconian libel laws that did in Oscar Wilde. People don't like to read unpleasant things about themselves on the Internet (and where would the NYT Magazine be if they did?). But even where the targets of bloggy exposure or lampoon do have a legitimate grievance, must they head straight to the courts to settle it? Below, two recent libel cases involving the Internet, and one bonus intellectual property dispute involving a moppet and a Christian fantasist.