Facebook to sell apps through new online hub

SAN FRANCISCO Wed May 9, 2012 8:54pm EDT

A giant ''like'' icon made popular by Facebook is seen at the company's new headquarters in Menlo Park, California January 11, 2012. REUTERS/Robert Galbraith

A giant ''like'' icon made popular by Facebook is seen at the company's new headquarters in Menlo Park, California January 11, 2012.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Facebook Inc unveiled a new hub for consumers to find games and other apps on the social network, including its first storefront for selling paid apps, in the company's latest effort to expand the ways it makes money from its massive audience.

The new App Center, which Facebook said will launch in the next few weeks, comes as the company is preparing an initial public offering that would value the company between $77 billion and $96 billion.

A key concern for investors is Facebook's slowing revenue growth, due in part to the widening trend of consumers accessing its service on smartphones, where Facebook provides limited ads.

In an amended prospectus filed with the Securities and Exchange Commission on Wednesday, Facebook said the popularity of mobile devices has caused its number of daily users to grow faster than the number of ads it is delivering.

Facebook described the number of mobile ads it has recently begun showing to users as "immaterial."

Facebook makes the vast majority of its revenue from online ads, although it also collects fees when consumers purchase goods from within social apps, such as Zynga's Farmville.

The App Center will, for the first time, allow software developers to sell apps to consumers directly on Facebook.

Consumers will need to use Facebook Credits, the company's payment system, to purchase the apps and Facebook will take a 30 percent cut of the revenue as it does with in-app purchases, said Facebook spokeswoman Malorie Lucich.

Facebook is introducing the app service to give software developers additional options, but the company expects in-app purchases to remain more prevalent on the social network, said Lucich.

Apps, ranging from social games to music services, are popular activities on Facebook, the world's No.1 online social network with roughly 900 million users. According to the company, 200 of the apps that are available on Facebook have more than 1 million users.

The App Center will feature apps that designed for PCs as well as for mobile devices such as Apple Inc iPhones and Android smartphones. If a mobile app requires installation for the mobile device, Facebook said it will direct users to Apple's App Store or Google Inc's Play store to download the app.

The App Center will showcase apps based on the quality scores that users give apps and other data Facebook collects, such as how often and how long people use apps. Each user will see a different, customized version of the App Center, rather than one standard version of the App Center.

(Reporting by Alexei Oreskovic; Editing by Matt Driskill)

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Comments (2)
Bilderberg12 wrote:
Facebook acting as affiliate site directing buyers to the iTunes store is just the start of a myriad of ways it can monetize it’s platform. Given the politics and manipulation of App Store ‘top selling’ lists the trusted environment of Facebook friends recommending apps is a superior model. Furthermore Facebook will turbo-charge app sales by promoting the gifting of apps, an economical and ecofriendly way to treat friends and clients to tech savvy treasures. Send your favorite foodie iPhone app Tip This by Maitre d’ Malone and let them get treated like restaurant royalty for a change. They’ll be glad you did.¬†http://itunes.apple.com/us/app/tip-this/id454248572?mt=8

May 10, 2012 2:37pm EDT  --  Report as abuse
Bilderberg12 wrote:
Facebook acting as affiliate site directing buyers to the iTunes store is just the start of a myriad of ways it can monetize it’s platform. Given the politics and manipulation of App Store ‘top selling’ lists the trusted environment of Facebook friends recommending apps is a superior model. Furthermore Facebook will turbo-charge app sales by promoting the gifting of apps, an economical and ecofriendly way to treat friends and clients to tech savvy treasures

May 10, 2012 2:41pm EDT  --  Report as abuse
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