Bay Partners, a San Francisco area venture capital fund that invests in Eventful, PicksPal, and Riya among others, has announced AppFactory a seed fund aimed at developers on the Facebook Platform. AppFactory will invest $25,000 to $250,000 in each Facebook app as well as offering technical and business assistance and mentoring. The program is being headed by Salil Deshpande and Angela Strange and will specifically target applications being launched for the Facebook platform, or existing companies who are "changing their strategy to become a Facebook focused application."

The AppFactory investment program joins a pool of new, low-dollar investment funds such as Charles River Ventures' QuickStart program, Y Combinator, and TechStars. But perhaps it is most comparable to Google's Gadget Ventures program, because it is focused on a specific platform.

Bay Partners is taking a significant risk by funding Facebook-focused apps, though the investments will be relatively small ones. While there have been a couple of acquisitions of Facebook apps, thus far Facebook has not allowed app creators to monetize their apps (some creative apps or ports of existing applications are monetized via affiliate links or sales of premium services, however). It remains to be seen whether a successful business can be built on top of Facebook, or whether it is wise to so closely tie your business to the fate of another.

Deshpande and Strange think that Facebook has become a "Social Operating System," and that Facebook's platform will, like Windows did in the 90s, lead to an economy of third party applications built on top of it. "We are seeing the birth of web platforms, and these platforms become distribution mechanisms for entrepreneurs," Deshpande told Ajaxian. "We definitely see the open Facebook platform resulting in real, valuable applications."

I agree with Deshpande that right now the Facebook platform has seen mostly "simple, almost trivial" applications, but with time apps should grow more complex and useful. I remember telling Richard when the Facebook platform was first launched how brilliant I thought the strategy was because one killer app -- something that people can't live without -- could cement Facebook as the social platform on the web. By opening up they take the burden off of themselves to come up with it, and let thousands of developers attempt to create that app for them.

With AppFactory, Bay Partners is hoping to get a piece of that killer app when it comes along. The challenge, will be to figure out how to monetize it. Andrew Chen posted recently about how hard it will be to monetize a Facebook widget. "Incorrect conclusions are being drawn from the unmonetizability of some apps that have spread fast on Facebook to date," said Deshpande. "We are interested in backing entrepreneurs that will be imaginative about what types of applications can be built on Facebook’s Social OS."

What do you think? Is a Facebook application-centric fund a good idea or a bad one? Will the Facebook platform pay dividends for those investing in it? Leave your thoughts in the comments.