App Store pay-to-play redux

There has been a lot reaction to Bloomberg’s story of pay-to-play App Store results. Initially, I discounted the report on grounds that Apple doesn’t stand to make a lot of money on it. Having thought about it more, and considering new evidence, I’m not so sure. Namely, Marco Arment‘s and John Gruber‘s pieces made me reconsider:

Also, Arment raises a good question, wondering about the motivations of whoever leaked the story to Bloomberg:

Either to warm us up to the idea so we’re not so mad in June, or by someone inside who doesn’t think it’s right and wants ammo to win the argument internally.

I’ve been wondering about this too. I don’t think it makes sense that it’s a trial balloon from someone in favor of the program. Apple doesn’t care about “warming us up” to changes. They don’t care. I think it makes more sense as a leak from someone opposed to it, and who foresaw that it wouldn’t go over well. Damn curious either way, though.

The App Store started off indie because of the shared code with Mac and intense developer interest, but I think Apple’s plan has always been to cater to big brands, like Nike, Disney, Bank of America, etc. Arguably, Apple has an incentive to keep the cost of software on the App Store as low as possible, because a rich ecosystem of low-cost apps further justifies the high cost of their hardware. Here’s Ben Thompson on this point in 2013:

It’s a reason to buy Apple hardware, and that’s all that matters. Anything that on the surface makes the store less desirable for hardware buyers – such as more expensive apps – is not in Apple’s interest.

The reason I was wrong about Apple making money on paid search is I was looking at this from my own perspective, that Apple doesn’t stand to make money from me (and people like me) on pay-to-play App Store search results. But from the big brands like Nike, Disney, and Bank of America, etc, Apple absolutely stands to make good money. And perhaps Apple believe this to be a way of solving the discoverability problem too. Another reason I was wrong is that Apple doesn’t stand to make a lot of money compared to their hardware today, but mobile trends suggest that people are spending less and less time searching for things in their browser on, say, Google, and increasingly spending time in apps. Bloomberg themselves called this a “Google-like” approach, and so maybe Apple is thinking this is how they can take some of Google’s future business.

In any case, I think we should all wait for an actual announcement from Apple before getting to worked up about this.

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