Did Facebook underestimate the Platform's success?

SECOND UPDATE: Check the end of this post for some more information from Facebook and ViddYou.

I think most of the Web has reached the consensus that Facebook Platform, the social networking site's new initiative to open up its service to third-party companies' specially-designed applications, has been a resounding success. Anecdotally, I can say that "techy" people I know, who had originally dismissed Facebook as a glorified address book, are now starting to think that it has a whole lot more street cred. And I know some people who are more or less addicted to some of the new features (throw a sheep at me, will ya?)

But whispers have been spreading that perhaps Facebook--generally known for being methodical and well-organized, choosing to roll out features incrementally rather than going for huge revamps--might not have predicted just how popular the new Platform would be, and wasn't ready for the onslaught of bandwidth activity. Yesterday, there were some rumors going around that Facebook had had to sell a full 10 percent of its shares in order to purchase enough hardware to handle its rapid user increase. Looks like the original story was reported on the Web site of the U.K. newspaper The Times and was then pulled. (Conspiracy theorists may point out the fact that The Times is owned by Rupert Murdoch's News Corporation, which also owns Facebook's chief rival MySpace. Personally, I think it's more likely just a case of some reporting that turned out to be based on unsubstantiated rumor.)

If true, basically, it would indicate that Facebook, often singled out as a red-hot potential acquisition target, wasn't as financially stable as the tech community would have thought. Tough to believe, since we've had every indication that the company is extremely well-funded, financially efficient, and has pulled in adequate advertising revenues. So, like most others following the social networking scene, I dismissed it as speculative gossip.

And I still think the original claims in The Times were untrue, but some more concrete signs have indeed indicated that Facebook wasn't fully ready for the whirlwind success of the Platform. While logged onto Facebook this morning in an attempt to engage in a SuperPoke war with one of my friends, I saw this:

On the right is a little mini-advertisement for a video blogging start-up called ViddYou, with the added note of "Check them out! They loaned us servers to stay up!" I'd seen small ViddYou ads on Facebook before over the past few days, but nothing that was accompanied by the "they loaned us servers" message. As for the company itself, it looks like a very small Bay Area start-up founded by two guys named Ryan and Aaron. ViddYou has also created a Facebook Platform application called "Video Blog."

So it does indeed appear that Facebook may not have had the server power to handle the F8 gold rush, and may have had to rely on some borrowed bandwidth. We've sent a note over to ViddYou about this and will update this post when comment comes in have included co-founder Ryan Bailey's comment below.

But it looks like things have stabilized over at Facebook, and any server crashing--early adopters of the Facebook Platform applications can attest that there was--was quickly forgiven as growing pains that stemmed from new users and third-party content flooding the site. If anything, borrowing server power from a tiny start-up ultimately humanizes Facebook (imagine if Steve Jobs' projector malfunctioned pre-keynote and he had to borrow one?) and undoubtedly gives ViddYou some positive buzz. With Facebook getting all the accolades it has been recently, it's probably a plus to be on the company's good side.

UPDATE (x2): I just got off the phone with a Facebook representative, and it cleared a whole lot of things up about the somewhat cryptic "thanks for the server space" message. The catch is, even though third-party Facebook apps are still hosted on the facebook.com domain, the third parties in question were responsible for "building" the pages, and any advertisements on them are most likely on behalf of that application's creators.

I also touched base with ViddYou co-founder Ryan Bailey, who confirmed to me that the company had an idle server that they had offered to Facebook Platform developers who may have been in need of the extra power--but not to Facebook itself as far as he knew. So what it's looking like is that the "thanks for the server space" message was on behalf of the SuperPoke team, not Facebook. Makes a lot more sense, given the (vast) difference in size of the two companies.

But, especially given the recent rumors that Facebook had been short on server space in the past, it's an interesting example of how Facebook is going to have to make sure that third-party content and promotions aren't mistaken for its own in the future. This was a small occurrence (and our bad) but it'll be interesting to see if any snafus ensue from developer content getting mistaken for Facebook's own. From what it sounds like, Facebook Platform's terms of use are stringent enough to prevent this from causing significant trouble.