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Facebook Looks to Cash in on Mobile

May 10, 2012

Facebook is changing its approach to application discovery in advance of its IPO. According to a release posted Wednesday to the social network's developers blog, the new App Center allows developers to charge for applications for the first time.

The App Center is intended to increase the number of mobile applications that operate over the social network. The pivot to a centralized commerce hub appears to be a way to begin to patch the company's acknowledged weakness in mobile revenue. Before the App Center was conceived, Facebook app developers relied on viral pass-along to build buzz for popular apps. The use of a centralized e-commerce hub represents a departure from that social discovery model.

Thus far, Facebook hasn't been able to monetize the audience of more than 26 million users of its mobile application. Analysts have made much of this risk factor in trying to assess Facebook's upcoming public offering. In its own S-1 filing with the SEC, the firm acknowledged, "We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven."

A report released Monday from online analytics firm comScore indicates that users of Facebook's mobile app are more engaged with the service, in terms of time spent, than those who access via desktop browser.

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