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.

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:

• Originality of Concept: Does the application introduce a great idea in a new and unexplored area?
• Market: Is this application targeted to key audiences or meet compelling market needs?
• Social/Useful: Does the application enable people to interact with each other? Does it deliver real value to users (including entertainment)?
• Expressive: Does the application allow people to share more information?
• Intuitive: Is the application compelling and easy to use? Does it have a well-thought-out user experience?
• Potential: Can it be a real business someday?
• Team: Do you believe this team can execute and is driven to succeed?

Facebook's criteria, translated:

• Originality of Concept: Does the application do more than bring a ripoff of a popular MySpace feature to Facebook? You know, the kind we can have an intern copy between yawns?
• Market: Would you use the app if it weren't created by you?
• Social/Useful: No really, would you?
• Expressive: Does the application allow people to share more information? Will it advance peace talks in the Middle East?
• Intuitive: Is the application easy to use? For a drunk frat boy at UCLA?
• Potential: Can it be a real business someday? Do you know what a real business is?
• Team: Do you believe this team can execute or do you we need to execute your team?

(Photo by Bill in Ash Vegas)

Weiner did meet with Zuckerberg over dinner to discuss a top position at Facebook — the COO spot that Sheryl Sandberg now occupies. But Weiner bombed, we're told, ordering a fancy bottle of wine (Zuckerberg's not a big drinker) and generally playing it slick. The two utterly failed to connect.

The notion that Facebook's venture capitalists could install a CEO over Zuckerberg's head is nonsensical. Greylock's David Sze doesn't even have a board seat; Jim Breyer of Accel is on the board, but he's easily overruled by Zuckerberg and Peter Thiel, the entrepreneur-friendly former PayPal CEO. Zuckerberg has the right to appoint two more board members, and one of the seats is rumored to have gone to Netscape cofounder Marc Andreessen, who strikes me as an extremely unlikely ally for Weiner.

So where does that leave Weiner? Zuckerberg may not like him, but Zuckerberg's VCs do, which leaves him with the consolation prize of an EIR job. And Yahoo's conspiracy theorists in need of something new to talk about. How about Flickr cofounder Stewart Butterfield's gonzo resignation email?

Back in 2006, Rapt cofounders Adam Galper and Paul Dagum sued Sheeline and Patterson's firms, accusing them and Chavez of unfairly bolstering their stakes in Rapt. But that's sometimes what happens when a startup needs four funding rounds. The parties settled 10 days later. We're hoping somebody remains bitter enough to tell us how much Microsoft paid.

The same way flatlining startups always do: the promise of an imminent IPO. Or at least that's what Trident Capital's Woody Marshall told VentureBeat.

The party circuit last night was no different. With MySpace at SFMOMA,Yelp at the Cartoon Art Museum, and a host of others scattered between the W and the Thirsty Bear, it was a mild party night to say the least. All suits, all half-drunk, all talking on their fucking Bluetooth headsets, despite the deafening music and chatter.

"What?! No, paradigms! Do you hear me? No, no no no, I said 'going forward' ... no, can you hear me? Shifting paradigms going forward ... No ... Facebook... No ... I said 'paradigms'!"

Last night's parties got off to a slow start, with a cavalcade of rejected HTML gurus drinking themselves to enjoyment at the House of Shields. They were obviously depressed by the conferences boring tone, and focus on moneymaking. These were the once-weres, the might-have-beens, and the suitless masses.

The suits were over at the W, where Sun, Accel Partners, and the German government all had their soirées. Sun's was relatively subdued, what with all the press and juicy Java details. The Germans were quite awkward, with a schwanky full-service meal served inside a miniature conference room, complete with menus, crystal glassware, and expo booths around the side. Oddly, no one really felt comfortable eating, only standing around and watching as the German consulate folks resisted the beer.

Of course, the real suit-haters were over at the Yelp party around the corner. Kind of appropriate for them to have it at the Cartoon Art Museum, since Yelp, without a buyout offer from Google, is basically a cartoon impression of a startup. It's been around so long now that Google can only see them as a potential competitor, and a potential database to buy.

But that didn't stop the Yelp folks from bringing in all their relatives, friends and roommates to crowd the venue and eat the free food. In half an hour, only two suits made it in; the rest were urban hipsters seeking a free meal, some of them looking homeless.

As for Accel Partners, Facebook's big venture-capital backer, over at the W, it was a standard W affair, with potstickers and chocolate cake. Inside, it was all "How's your capital?" and "Can I stroke your cock for you Mr. Wagner?" The real function of this event was to provide adequate alcohol to fuel the maniacs who would eventually wander into the MySpace party after 8.

Here's a tip: if you want your party to be wild and crazy, and packed with drunks, start it after 8. That's exactly what MySpace did, and that's exactly what happened. When you get down to it, this event wasn't really too spectacular. The food was standard, the drinks were relatively cheap, and the art was in danger of being puked on. Hmmm ... sounds a lot like MySpace's clientele.

Most people in the know believe that Facebook's revenues, such as they are, come not from actual ad sales but from a revenue guarantee Microsoft offered in a desperate bid to win the right to sell ads on its site. If such a guarantee exists, then Mark Zuckerberg doesn't have to lift a finger: Whether or not Microsoft actually sells ads, it still owes Facebook money. A sweet deal, as long as it lasts — which is 2009. But Breyer knows that, were Facebook to go public, it would have to disclose just how much of its revenues come from Microsoft. So he's just bluffing by talking up Facebook's Microsoft-inflated numbers.

Microsoft, which is in a better position than anyone to see how poorly Facebook's ads perform, should hardly be happy about paying Blodget's bubbly price for Facebook. After all, the revenues Breyer brags about are coming out of Microsoft's own pocket. Blodget's right about one thing: If Microsoft buys Facebook, it would be out of sheer desperation, not any kind of financial logic.