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It is important to consider Zuckerberg's history. Given his history of screwing over business partners and friends, it's almost a certainty it will happen. There is already a negative image of him in the startup community, so Facebook doesn't really lose much by stifling the growth of YC startups that he could argue would never have succeeded without Facebook.

The only question now is: what negative impact will this have on the startups? If you take a look at the recent squabble with Zynga and the introduction of credits, you'll see that Zuckerberg is bold enough demand 30% of revenue for a Paypal clone. Given Zuckerberg's history of changing policies like privacy for the worst, it wouldn't even be a surprise if he raised that to 50%. Would investing in YC startups be profitable if their valuations where cut by 50%? Would they even be worth that much knowing that Zuckerberg could clone it or demand even higher margins on a whim?

Instant personalization will likely see similar fees once YC is hooked on it. Though past performance is not an indication of future results, I have to say the future looks very bad for anyone embracing the Facebook ecosystem.

I think zuckerberg realized it when he looked at what the app store was charging, realized he was in a similar position and realized that it could work.


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