Social media technology

Facebook announces app store, but issues revenue warning

Warwick Ashford

Facebook has warned investors that the rapid growth of its mobile apps threatens its long-term financial prospects as users abandon their PCs.

The warning coincided with the announcement of Facebook's own app store to promote mobile programs that operate using the social network.

Facebook's "App Center" is being touted as the "new, central place" to find apps, and developers have been told to prepare for its launch in the coming weeks.

While the App Center will enable developers to charge for apps, Facebook said it was not designed to compete head-on with Apple's App Store and Google Play.

App Center is aimed at promoting mobile apps that use Facebook, whether they are on iOS, Android or mobile web, the social networking firm said. But only apps that use Facebook's log-in system Connect will be eligible to be included in the store.

Facebook will take a 30% cut of all transactions using its Facebook Credits virtual currency, which is mandatory for games developers on its platform, according to the Financial Times.

Analysts said the App Center could enable Facebook could position itself as the first major app store to be platform-agnostic, according to the BBC.

Despite promoting its mobile apps, Facebook admitted growth in mobile use could damage future advertising revenue.

"If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetisation strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected," Facebook said in a statement.

Announcement of the App Center, potentially a new revenue stream, and the revenue warning, come just a week before Facebook is expected to go public.

Earlier this month, Facebook set the share price for its initial public offering (IPO) at $28 to $35 a share, which will value the company at up to $95bn.

The listing on the open stock market is set to realise the highest value to date for an internet firm, far outstripping Google's IPO valuation of more than $23bn in 2004.


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