NYC-based Buddy Media has raised $1.5 million in funding to expand AceBucks, a funny-money app for Facebook. An impressive set of investors includes Wallstrip’s Howard Lindzon, Facebook investor Peter Thiel, Mark Pincus, and James Altucher.
You earn AceBucks by playing games, adding sponsored applications to your profile, inviting other friends to join AceBucks, or filling out surveys. You can then spend them on virtual stuff — pictures of cars and flowers for your profile — or real stuff — auctions for iTunes gift cards. So far, there’s no way to purchase AceBucks with real money, and no way to cash out of AceBucks for real money.
Will it take off? A real micropayments system for Facebook makes sense, as does a system in which Facebook members can exchange goods, services, and cash. But AceBucks isn’t a dollar-based system yet, and new Internet “currencies” don’t have a stellar track record: see Flooz, Beenz, etc. (Second Life’s Linden Dollars are a new currency, but those are convertible into real dollars.)
Unless/until Acebucks becomes a real, dollar-based micropayments system, the key to its success will be getting it hooked deeply enough info Facebook that it is accessible and relevant (an API is on the way, the company says) and making sure it keeps a consistent value (no loopholes or pyramid schemes).
Buddy Media CTO Aryeh Goldsmith created the app this summer and sold it to serial entrepreneur Michael Lazerow for an undisclosed amount, forming the company. Lazerow previously sold Golf.com to Time Inc. in 2006 and university newswire U-Wire to Student Advantage in 1997.