Code Theft Allegations Can't Stop iPhone BubbleS

Foursquare has raised its first venture capital investment, and it couldn't have been easy: There are persistent rumors the social networking company stole its code from Google. Plus, it wanted to invest the money in a domain name. Ooof.

Dot-com address acquisition is a dubious vestige of the first internet boom, when branding reigned supreme over profits and functionality, before entrepreneurs realized people would just look for them on Google. It was also Foursquare's first use of a $1.35 million investment from Fred Wilson's Union Square Ventures and O'Reilly AlphaTech; the software company tells Business Insider it couldn't have switched to foursquare.com from playfoursquare.com without the seed capital.

Investors obviously weren't deterred by the Google theft rumors, either. Some people inside the Googleplex believed Foursquare co-founder Dennis Crowley launched the iPhone service with code from Dodgeball, which Google bought from him in 2005 and then shut down. Crowley apparently told people at this year's South by Southwest conference the same thing, reasoning that Google wouldn't mind since it wasn't using the code anyway. It seems a safe bet that either Crowley was right or the rumors were wrong, since it's hard to imagine O'Reilly and Union Square Ventures sinking in money if Google were poised to sue.

The incentive to dispose of — or ignore — the issue would have been strong; the iPhone bubble is fast inflating, and your typical venture capitalist hates to be left out of a good hype cycle.

(Pic: Crowley, by See-ming Lee)