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Facebook App Store Will Boost Popularity, Profit

Is there anything Facebook can't or won't do to keep its massive user base happy?

The social network giant just announced plans for a new Facebook App Store where Facebook friends can purchase games and other applications on its heavily trafficked site.

The new Facebook App Store, which will be formally known as the Facebook App Center, will feature applications for web browsers, and be available via the Apple Inc. (Nasdaq: AAPL) iPhone, Android smartphones, PCs and tablets.

The move will provide a platform for software developers to sell their products on the social site.

With over 900 million users worldwide, the new Facebook App Center opens up an alluring venue for developers and entices the social networking Web site's scores of members to keep coming back for new, current and popular applications.

Facebook's App Store is being launched in the midst of the company's highly anticipated, much-hyped initial public offering, expected on or around May 18.

And the Facebook App Store in not merely in the works, it is set to roll out in the next few weeks.

Another Reason to Like Facebook

The launch is simply another reason to like Facebook. The company persists in its aim to be innovative and contemporary, as well as profitable. The speed and ease at which the Facebook App Center will be launched has been applauded by industry analysts with none questioning Facebook's ability to successfully sell apps.

"So far, I see nothing not to thumbs-up here," wrote Matt Peckham for Time. "Sure, it means a little extra work for developers and new challenge metrics for getting an app included as well as made visible, but the end benefits for users, at least on e-paper, seem broadly win-win at this point."

At present, apps ranging from social games to music services are popular activities on Facebook. About 200 apps are now available on the site, attracting some 1 million users.

Facebook's App Store will feature apps based on the quality scores that users give them as well as other data Facebook collects, including how often and how long people use those apps.

Adding a touch of personalization, each Facebook user will see a unique and customized version of the Facebook App Center, rather than a single standard version.

Facebook App Store: A Money Maker

Facebook's App Center will work as more of a showcase for popular apps than as a store – but it'll still boost profits.

Facebook currently earns the majority of its revenue from online ads, in addition to collecting a nice chunk of change from fees when consumers purchase products from within the social apps, such as the vastly popular Farmville by Zynga Inc. (Nasdaq: ZNGA).

Despite the masses that flock to Facebook daily and spend hours trolling the site, revenue is slipping as more and more consumers access the site with their smartphones, where Facebook at present offers limited ads.

But that is about to change with the Facebook App Store launch.

Facebook on Wednesday once again amended its prospectus with the Securities and Exchange Commission (SEC) to include data regarding the new venture. Facebook noted in the filing that the attractiveness of mobile devices has led its number of daily users to grow faster than the ads it is delivering.

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

Facebook will list apps for Apple's App Store or Google Inc.'s (Nasdaq: GOOG) Play Store and will direct users to those stores to download the app. In those cases Facebook will not take a cut of the revenue.

But Facebook will get to promote apps that require a Facebook login, which should help drum up more traffic.

Facebook also intends to encourage developers to do more apps on which Facebook can collect that 30% cut.

[For the latest up-to-date information on Facebook's IPO, check out our Facebook Stock page. Facebook could start trading as soon as May 18.]

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