Facebook’s App Center Aggregates Others’ Apps To Gain Adoption

by Trefis Team
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Facebook has announced a new app showcase called the App Center, which enables users to find social apps easily. It is an application discovery platform, which will list mobile apps for multiple platforms, including web, iOS and Android and allow users to search for new apps and download them. It will specifically feature social apps which are powered by Facebook Connect. [1]

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Application discovery is one of the biggest pains about using smartphone platforms right now as it is getting harder for users to find the apps they want among the hundreds of thousands of apps available on each major platform. By leveraging its users’ social data, Facebook is best positioned to offer them personalized app recommendations which could boost download metrics and improve user experience – potentially a win-win situation.

Facebook will benefit significantly through this move. First of all, it will link to social mobile apps on other platforms like iOS and Android, driving downloads for them. While it won’t currently generate any revenue through this, we expect it to eventually cut deals to take a cut off each app purchase, once it starts driving huge download volumes.

Secondly, Facebook will also offer paid web apps as a part of the app store, on which it will make the standard 30% fee. And finally, Facebook can drive downloads for all free apps using Facebook Connect, further bolstering its position as the dominant social platform in the world. Facebook can not only gather additional data related to these apps, but also monetize those users by using targeted ads based on that data.

If Facebook is able to push developers to build web apps using Facebook Connect which will work with all platforms, instead of building native iOS or Android apps, it could also gain control of the app ecosystems of most major smartphone platforms, and generate a significant amount of revenue through app downloads going forward.

This could be the greatest move Facebook ever made in the mobile space.

We currently have a $82 billion Trefis price estimate for Facebook, most of which is derived from its advertising and virtual transactions businesses. It competes primarily with Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and Yahoo (NYSE:YHOO) in the online advertising space.

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Notes:
  1. Facebook App Center: More showcase than store, actually, CNET []
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