A few weeks ago Facebook announced a new app store to compete with Apple’s, Google’s and Amazon’s. Its an interesting but not surprising move and here the main thoughts I had on the news:
- Facebook don’t make any money on mobile (there are no ads). As mobile usage skyrockets, they will be exploring ways to both profit from the trend but more importantly to monetize the ecosystem where most of the users are. Users = ad revenue. Facebook are under a great deal of pressure to figure this out.
- I haven’t seen the details but I assume the App Center will allow Facebook to earn commission on every paid app that is sold. This represents an alternative way of monetizing the mobile market.
- The App Center will show apps for multiple mobile platforms, including Apple’s iOS and Google’s Android as well as PCs apparently. This is quite a big distinction, as it would facilitate a truly one-stop-shop for all your app-finding needs, and you could do it right from within Facebook.
- It will give their website a new wave of interest and diversify it from the stagnating and traditional social posting aspect. It has been said for some time that Facebook need to develop a ‘platform’ rather than a website. This sort of ecosystem expands beyond specific apps and services and allows the company to leverage far greater user insight and make each user more ‘sticky’ – the more of your services someone uses, the less likely they will be to migrate elsewhere.
- Google has the ultimate online platform (almost all their services link together and share a single username per person across all services), but it is very limited in how far it can go with support for iOS, which is a far more lucrative platform than Android (I’ve read that Google make more money from ad revenues on iOS than they do from Android!). Facebook can take advantage of access to both ecosystems, so it can appeal to more users. And it has a lot of users – the most of any site on the web, so it is in the perfect place to funnel through additional services.
- We’ve seen the platform approach before – remember Facebook’s attempt at email addresses? Its still live, but I don’t know anyone who uses it.
It’s not all roses though. Users still have to go via the Google Play store to actually download the app, so Facebook needs to demonstrate serious value-add to get people to go to their store first, although it does take apps to where the users are, thereby reducing the effort required for users to see apps and for developers to be seen.
It’s a long game. Expect future Facebook announcements to compliment a strategy of adopting and monetizing mobile