Bloomberg set off a wave of fear, uncertainty, doubt, and skepticism
with their report
alleging Apple’s plans to offer paid placement in App Store search results:
Apple is considering paid search, a Google-like model in which companies would pay to have their app shown at the top of search results based on what a customer is seeking.
Putting aside the fact that such a move seems un-Apple-like
, I don’t see how it would benefit Apple, either.
Google sells placement in search results because that is the core of their business model
. When a user finds and clicks a non-sponsored link in search results, it may serve Google’s ambition to collect information about users, but it doesn’t earn them any money. Without paid placement in Google search results, Google probably wouldn’t exist.
Apple’s overall business model is selling hardware with high profit margins. The business justification for the App Store is multi-faceted: its purpose is primarily to enrich Apple’s hardware products with the additional of novel third-party software, and secondarily to generate revenue in the form of that 30% cut that developers love to complain about.
To this end, it’s in Apple’s best interests to ensure that the intersection of the best
and the most profitable
software is presented to users in the App Store. This is probably why the tired old high-level charts are broken down by “Free,” “Top Paid,” and “Top Grossing.” Items that rise to the tops of of those categories are most likely to serve Apple’s business justification for the store.
Allowing third parties to pay for placement in the App Store would not contribute to Apple’s justifications for the App Store in any way. Who benefits from such a change? The businesses paying for the placement, presumably. It’s hard to see how paid placement would consistently benefit either Apple or its direct customers. It’s unlikely that paid listings would be used to highlight apps that are in line with Apple’s other goals for the store.
I hope that Bloomberg’s “hot tip” indicates that Apple is indeed brainstorming many ideas for improving search and inventory presentation in the App Store, but count me among the very skeptical that paid placement will be among the ideas that Apple actually follows through with.