Winds of Change on Facebook: Subscription-Based Apps and Location-Specific Advertising

Facebook announced plans to further support app developers` revenue growth by introducing a subscription payment system for all Facebook.com and mobile web apps. According to a blog post on the Facebook Developers page, this feature will be available as of July this year and is designed for developers to “establish a recurring revenue stream and offer updated content or premium experiences for a monthly fee.”

The announcement also points to a change in the currency of in-app items. It appears that Facebook`s initial intention to create a platform-wide virtual currency, with Facebook Credits kicking in back in 2009, was thwarted by game developers` plans to create their own, customized virtual currencies. Therefore, the platform is now set on supporting pricing in local currencies so app and game owners can “set more granular and consistent prices for non/US users and price the same item differently on a market-by-market basis.” In-app payments in local currency will become mandatory by the end of 2012.

Rumors of a flat-fee business model for apps on Facebook started with the launch of the platform`s App Centre. The real currency move may solve more than the price localization issue developers may have faced insofar as the disappearance of the Credits and of other app-specific currencies is likely to put an end to a very lucrative side of social scammers` business: fake game credit generators.

Facebook is also working to make the mobile side of its business more attractive to advertisers by including location in the mobile ad targeting mix.

Location is considered more accurate than its Facebook.com predecessors – the Zip code and the physical location shared by the user – and is likely to work wonders when correlated with the huge quantity of info online socialites share on the platform.

“Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers,” stated Carolyn Everson, Facebook`s vice president of global marketing solutions, in a telephone interview with Bloomberg. “We`ve had offers being tested over the last couple of months.”