Application platforms, broadly defined, are here to stay. Facebook’s platform, first launched in 2007, now has tens of thousands of applications. MySpace, which mostly relies on Google’s OpenSocial platform, has 4,500 apps available to users, and 211 million applications have been installed. The iPhone, which only launched its App Store in July 2008, has more than 10,000 applications, and they’ve been downloaded 300 million times.
These application platforms may even become a significant platform for more mainstream PC usage. Android is now being hacked to work on netbooks, and we believe Apple has plans to release a large form factor iPod Touch running their App Store platform. It’s not inconceivable that Microsoft would build this type of software distribution mechanism directly into Windows in the future.
But there’s a big gaping hole in all existing platforms. None have a direct payments platform to let applications collect micropayments from users.
Today app developers on Facebook and MySpace can create revenue by showing advertisements at very low CPMs. On the iPhone/iPod, developers can also charge for applications at the time of sale.