Facebook targeting mobile revenue with App Center launch

Facebook has announced that it will shortly launch its App Center, a new portal for its users to discover and rate smartphone apps.

Due to be launched “in the coming weeks”, the App Center will showcase iOS, Android and HTML5 apps. Facebook will use indicators such user rating and engagement to select the apps it feels are of the highest quality.

“The App Center is designed to grow mobile apps that use Facebook – whether they’re on iOS, Android or the mobile web,” explained Facebook engineer Aaron Brady in a blog post. “From the mobile App Center, users can browse apps that are compatible with their device, and if a mobile app requires installation, they will be sent to download the app from the App Store or Google Play.”

Eden Zoller, principal analyst at Ovum, believes that discovery of quality apps is an issue facing many smartphone users and although the App Center will not compete directly with Apple and Google’s app portals, the social network could still derive a healthy revenue stream from it.

“Facebook also seems to be selling web-based apps; non platform specific apps based on HTML 5, which it is selling on its own right. I think in that case, it is going to take the 30 per cent customary fee for the paid-for applications,” she said.

She added that it is very likely that Facebook will continue to building on the App Center after launch, particularly as its IPO is imminent and it is under pressure to demonstrate solid revenue streams from mobile use of its products.

“A growing number of Faebook’s users are interacting with the service via mobile devices, which is good, but it’s proving a difficult channel for Facebook to monetise,” Zoller said. “We know that it already sells and provides a lot of applications on the core Facebook platform – very successfully in the case of Zynga, for example, so to do this in a more formal and controlled way makes sense.”

The social network is also promoting its Facebook Credits virtual currency, which lets users buy virtual goods in apps, and one advantage that the Facebook App Center could offer users and developers is flexibility in how apps are purchased.

“Many developers have been successful with in-app purchases, but to support more types of apps on Facebook.com, we will give developers the option to offer paid apps,” said Facebook’s Brady. “This is a simple-to-implement payment feature that lets people pay a flat fee to use an app on Facebook.com. If you are interested in the beta program, please sign up to receive more information.”

Zoller added that Facebook is known to be working with mobile billing solutions provider Bango.

“So presumably there could be initiatives around in-application billing and it could do more around support for operator billing, so I think there is a lot of scope for Facebook in this space,” she added.