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Facebook Reveals a Way to Increase Mobile Revenue

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One of the biggest issues investors had with Facebook’s IPO was that the social network didn’t have a public plan on how it plans to increase revenue moving forward, specifically as more users gravitate away from its website and start to use its mobile app. The company is beginning to change that, however. Two major things happened on Thursday: the company announced billing through wireless carriers and TechCrunch revealed images of the company’s upcoming app store for iPhone.

Here’s how it carrier billing works: Users can simply buy digital goods, such as credits for games, right from their phones. It’s a compelling option, too, since users can make purchases on a whim and will not have to worry about making an actual payment until their wireless bill is due. Relying on impulse buying — the reason that $0.99 apps and in-app purchases are so successful — could turn out to be a great way for Facebook to boost its mobile revenue… for now. Facebook’s mobile carrier service is supported in the U.S. and in the U.K by AT&T, Sprint, T-Mobile, O2, Orange, Three and Vodafone.

The app store, no doubt, will provide Facebook with even more revenue. Developers keep 30% of apps sold and Facebook will take the rest. The images above show a very clean environment that looks easy to use, which is key to the success of any app store. Additionally, users can opt to purchase applications from Facebook instead of Apple’s iTunes App Store. That means it’s plausible that Facebook will steal a bit of revenue from Apple, should someone decide to make an in-app purchase from Facebook’s version of Draw Something using Facebook Credits instead of Apple’s, for example.

Is it enough to please investors? We’ll have to wait until Facebook’s next earnings report to see what type of revenue the two new services provide, but it’s not a shabby start.

[via: Facebook, Tech Crunch]


Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...

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