Games Top the Charts in the iPhone and Android App Markets

by Ben Lorica | @dliman | comments: 2

While it might be true that the number of Book apps is growing at a faster rate, Games continue to dominate the list of popular U.S. iTunes Apps. Games accounted for about a fifth of all iTunes apps over the past week^†, but the category continued to have a disproportionate share of the Top 100 charts, accounting for 52% of the Top Grossing, 56% of the Top Paid, and 50% of the Top Free apps:

Since most Book apps are actually individual e-books, the Gaming category would have a hard time keeping up with the ever increasing number of Books. Once publishers figured out how to turn their titles into iPhone apps, the number of Book apps started growing faster than Games. Nevertheless Games continue to rule the Top 100 charts.

A similar story is playing out on the Android platform: the most popular Android apps are primarily Games. (In the Android taxonomy, most Books are in the Reference category.)

Returning to the top iPhone apps, the price of the Top Grossing apps stabilized somewhat last week. Except for the top decile (rank 1 through 10) for which the median price was about $7, the median price across the other deciles was around $5.

Over the last week, the Top Paid Games were slightly more expensive than apps that made the overall Top 100 Paid list. iPhone Game developers will tell you that (visually) compelling and engaging iPhone Games are far from trivial to design and market^††. So it's no surprise that the creators of the most popular Games are starting to charge a little more for their software.

(†) Data for this post was for the week ending 11/1/2009.
(††) First, designing for such a small screen poses a major challenge. Secondly, the sheer number of Game apps (close to 20K last week) makes it hard to create something that turns into a long-running top-seller.

The iPhone as a Gaming Platform: Share of Top Apps By Category

by Ben Lorica | @dliman | comments: 4

As a follow-up to my recent post on the Top Grossing Apps list on iTunes, I examined three lists highlighted in the app store: the Top Paid, Top Free, and Top Grossing Apps. Believing that many users scan these lists, developers covet a spot on any of these Top 100 charts.

In my previous posts, I've highlighted that Games is the largest^† category, accounting for about 20% of unique apps. The graphs below show that the gaming category has a much larger share^†† in each of the three Top 100 lists:

68% of the Top Paid, 67% of the Top Free, and 50% of the Top Grossing apps were Games. Other categories that had disproportionate share of apps in the Top 100 rankings include Social Networking, Photography, (and to a lesser extent) Sports, and Utilities.

In contrast, three of the five largest categories (Books, Travel, Education) were severely underrepresented in each of the U.S. iTunes Top 100 Charts.

(†) Size of a category is measured in terms of unique apps.
(††) Data for this post was from the two weeks ending 10/4/2009. I consider an app as being in the Top 100, if it was listed among the most popular (free, paid or grossing) apps, sometime during those two weeks.

The Price of The Top Grossing iTunes Apps

by Ben Lorica | @dliman | comments: 5

In response to developer complaints that more expensive apps were getting buried at the bottom of popularity rankings, Apple recently introduced a separate ranking based on revenue. (The Top 100 Paid apps ranks apps are based on number of downloads.) In this post, I'll validate that compared to downloads, the Top 100 ranking based on revenues does contain pricier apps.

For each decile, I calculated the MEAN price of the Top 100 Apps over the 2 most recent weeks. Notice that for the most recent week, the MEAN price for each decile^† of the Top 100 Grossing apps is more than $5. In contrast, none of the deciles for the Top 100 Paid apps had a mean of $4 or more. There isn't much of a relationship between rank and price although there was a slight downward trend in the price of the Top Grossing apps over the most recent week: except for the blip in the 5th decile of apps ranked 41-50, the top deciles tended to have higher MEAN prices.

The same situation holds when one looks at MEDIAN price during the most recent week: each decile of the Top Grossing apps had a MEDIAN price of $3, while no decile in the Top 100 Paid apps had a MEDIAN price of $2.

Unique Apps by Category: About two weeks ago, the U.S. iTunes store crossed 90,000 apps^††. Last week, the Travel and Education categories displaced Utilities, to claim spots in the Top 4 largest categories:

(†) I refer to an app as being in the Top N, if it was listed among the N most popular (paid or grossing) apps, sometime during the given week.
(††) Since inception, 90K different apps have appeared at some point in time. Over the most recent week, more than 85,000 apps appeared in the U.S. iTunes store.

The Most Popular iTunes Apps Aren't Always The Cheapest

by Ben Lorica | @dliman | comments: 5

While the most popular aren't always the cheapest, on average, the Top 10 Paid apps^† tend to be cheaper than less popular ones (those ranked 45 to 55 or 91 to 100):

The situation varies across categories and in this post I'll briefly examine a few of the larger ones. In both the Books and Games categories, the mean price of the Top 10 most popular paid apps tend to be lower than less popular ones. In other large categories, such as Navigation^†† and Travel, the situation isn't as clear: the mean price of the Top 10 most popular paid apps aren't always lower.

(Click here for a larger version of the chart above.)

Since the mean tends to be susceptible to outliers (a few high-priced apps), I decided to graph the price distributions for the top paid apps in the categories displayed above (click here for the graph). I looked at statistical densities^††† on three dates: 3/8 (24 weeks ago), 5/31 (12 weeks ago), and last week. In the Book category, the top 10 paid apps now seem to be dominated by lower-priced (99 cent) titles. In the Game category, the top 10 game apps were comparatively lower-priced 24 weeks ago but things have changed slightly: the top 10 game apps are no longer substantially cheaper than less popular ones (rank 45 to 55, or rank 91 to 100).

(†) I refer to a paid app as being in the Top N, if it was listed among the N most popular apps, sometime during the given week.
(††) For display purposes (i.e. to avoid distorted looking graphs), I omitted a couple of popular (top 10) but unusually high-priced Navigation apps (MobileNavigator and TomTom).
(†††) Based on small samples, the approximate densities drawn are far from robust, but they provide another tool for comparing categories. Boxplots over time would be another method.

The iTunes App Store Rolls with the Travel Season

by Ben Lorica | @dliman | comments: 3

Sometime last week, the iTunes app store passed 70,000 unique apps (70K apps have appeared in the app store since it launched). One of the fastest-growing categories in the U.S. iTunes app store has been Travel, displacing Education to move into the top 5 largest categories. Welcome to summer vacation!

Next to the Book category, Travel is the most competitive category, with each seller averaging about 6 unique apps during the most recent week. A quick inspection of recently released Travel apps included a lot of travel guides -- which like the Book apps, are fairly easy to create compared to apps in other categories.

The other milestone I wanted to highlight is the iPhone's growing importance to Apple's bottom line. Two years after its launch, last quarter was the first time the iPhone surpassed the iPod in terms of revenue:

In a recent conference call, Apple CFO Peter Oppenheimer noted that one of the main reasons for developing the iPhone was the anticipated drop-off in sales of iPod products. What's been impressive is how things worked out exactly as Apple hoped: the transition from one product line to the next has been remarkably smooth.

Data for this post was through the week ending 8/9/2009, and covers the U.S. iTunes app store.

iTunes App Store Incubation Period Increases In Most Categories

by Ben Lorica | @dliman | comments: 4

Over the last few weeks, media coverage of the iTunes app store often touches on concerns about Apple's approval process. Some apps drew enough complaints that Apple pulled them off the app store. With thousands of developers wanting to launch apps and Apple unable to come up with a more efficient vetting process, I'm revisiting an earlier post on the duration of incubation periods by category:

Individual apps also have release dates, which based on Apple's recent changes to the app store, represents the date developers upload their apps to iTunes Connect. The period between the release date of an app and the date it first appears in iTunes is when Apple performs a series of undisclosed QA tests. Because it translates to a more favorable position when users sort by release date, most developers prefer this incubation period to be as short as possible.

The number of new apps has been on a steady upward trend since February. The spike that occurred during the holidays (12/21/08), which I highlighted In my earlier post, now pales in comparison to the number of new apps that are being launched weekly. (Over 3,000 apps launched the week ending 6/7/2009.)

With many more apps being launched each week, Apple is surely having to sift through more apps. Not surprisingly, the incubation period (i.e. time between release date and the date an app actually appears on the app store) has gotten longer. In all but the Travel category, the MEAN incubation period has been trending upward:

Note the difference in the incubation period across categories: while many more Games are launched each week, on average Music apps spend a few more days locked in Apple's approval process. (It probably doesn't help the Music apps that the iPhone already comes with a music app!) In June, the typical Navigation app spent 3 weeks waiting to get approved.

As Symbian recently found out, when it comes to evaluating mobile apps, relying purely on automatic scanners isn't sufficient. Human inspection is important, but Apple needs to figure out how to meet the growing number of new apps being submitted. A combination of more transparency (allow developers to communicate with Apple referees via email, interactive chat session, ...) and crowdsourcing (have the thousands of developers and avid users flag questionable apps) could help shorten the incubation period. Any other suggestions on how to improve and speed up the iTunes app store approval process?

Data for this post was through the week ending 7/26/2009, and covers the U.S. iTunes app store. Click here for a larger version of the Incubation By Category chart. In my previous post, I computed the MEDIAN incubation period in days.

News Providers are Embracing the iPhone

by Ben Lorica | @dliman | comments: 5

To mark another iPhone milestone (1.5 billion app downloads in a year), I checked our iTunes app store data warehouse^†. I was expecting the Books category to continue to register the fastest-growth but was instead greeted by an explosion in News (and to a lesser extent, Navigation) apps:

On any given week, about 22% of all apps in the U.S. iTunes store are free. The percentage of free News apps is slightly higher (31%). The most popular News apps are from media companies (and tend to be free), while paid News apps are mostly software for reading and organizing news, or premium content. News content providers increasingly need to have a strategy for delivering content to the iPhone and similar mobile devices. At least for the iPhone, many news organizations have done just that: during the week ending 7/12, there were over 1,500 News apps.

The second fastest-growing category (in terms of # of apps) over the last 12 weeks was Navigation, a category that our resident geo expert Brady blogs about frequently. The share of free Navigation apps (14%) is among the lowest of all the categories (behind Books and Travel).

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2 Years Later, the Facebook App Platform is Still Thriving

by Ben Lorica | @dliman | comments: 8

In a few weeks, the Facebook application platform will mark its second anniversary. While it garnered lots of press coverage in the months after it launched, the arrival of the iTunes app store shifted attention away from Facebook's vibrant ecosystem. The media glow is understandable: among other things, the younger iTunes platform is adding apps at a much faster rate than Facebook or Myspace.

Games comprise a sizable chunk of app revenues in all three platforms and recent stories suggest that 2009 has been a great year for developers. The substantial revenue generated by popular Facebook (and Myspace) apps has been the subject of articles in VentureBeat, TechCrunch, and Inside Facebook. There have also been recent estimates for the revenue generated by iPhone apps (see here and here). Game developers in particular are benefiting from having a multitude of platforms: Games are the largest iTunes category, and the second largest category in both Facebook and Myspace. In addition, 4 of the top 10 most successful Facebook app providers are Game developers.

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The iTunes App Store and One-hit Wonders

by Ben Lorica | @dliman | comments: 0

Thousands of sellers created the 40,000 apps that have appeared in the U.S. iTunes app store. Measured in terms of apps per seller, developer and vendor engagement has gotten stronger over time:

The above average (mean) is somewhat misleading: 52% of sellers have produced just one app, and 80% have released 3 or fewer. Certain types of apps (e.g. electronic books) are easier to create, thus inflating the overall average app per seller. The disparity in complexity across categories is captured in the chart below. Aside from Books, Travel and Education apps also tend to be easy to develop and launch. (Note: Some apps are listed in more than one category.) The number of apps per seller also depends on whether one is interested in Paid or Free apps.

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Waiting for the Billionth Download

by Ben Lorica | @dliman | comments: 9

Over the next week, the iTunes App Store is set to record its billionth download, an impressive milestone given that it launched less than a year ago. Granted the actual usage of most apps is spotty. To mark the event, I'm updating a few charts that I produced for previous posts.

Slightly over 35,000 apps have appeared in the U.S. app store. Over 31,000 were available in the last week alone, about 78% of which were PAID apps:

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The Fastest-Growing Category in the iTunes App Store: Books

by Ben Lorica | @dliman | comments: 13

At least as measured in terms of number of unique applications, Books have grown the fastest over the last 12 weeks. (Data for this post limited to apps on the U.S. iTunes store through 3/1/2009.)

Granted releasing an e-book for the iPhone is a lot easier than writing a gaming application using the iPhone SDK. Roughly 6 out 10 of the Books on the app store sell for 99 cents or less, and 1 in 20 are free:

The number of premium priced Books (i.e. those priced at $10 or more) has grown from roughly 1 in 50 Books 12 weeks ago, to 1 in 10 during the most recent week. When I talk to iPhone developers, I get the impression they're actively conducting pricing experiments. No surprise that publishers are also conducting their own test-and-learn pricing studies.

While the iPhone is attracting e-book readers, gaming apps continue to be the most popular. Games remain the dominant category both in terms of number of apps (24% of all apps), and in terms of sales. During a typical week, two-thirds of all apps on the TOP PAID APPS list are Games, while a lone Book spends time on the list. Also note that competition is much fiercer these days: compared to Aug/Sep 2008, fewer apps are able to crack the TOP PAID APPS list during a calendar week.

The total number of unique apps continues to grow steadily with close to 18,000 apps appearing in the U.S. app store last week (about 30% of which were free). Since the launch of the U.S. app store, close to 25,000 have appeared on iTunes:

The recession has been accompanied by a decline in the price of top-sellers in the U.S. app store. The mean price of an app on the TOP PAID APPS list has trended downward, but has stabilized to about $2.55 over the last month. The corresponding mean price in August 2008, the month prior to the onset of the banking crisis, was about $4.13.

While the MEAN is sensitive to a few expensive top-selling apps, the MEDIAN price of the TOP PAID APPS has also declined. From a value of $2.92 in August 2008, the MEDIAN price of such apps has settled to about $1.99 over the last 11 weeks.

The Incubation Period for iPhone Apps is Declining

by Ben Lorica | @dliman | comments: 4

A conversation with Raven Zachary at Macworld prompted me to dig into the state of new apps on the (U.S.) iTunes App store. First, I looked into the number of new apps that become available on a weekly basis. In the chart below, an app is considered new if it appears in the app store for the first time in a given week:

After a huge spike right before Christmas (close to 1,200 new apps on 12/21), the number of new apps has dropped to levels last seen in early November. (Note data for the week of Jan-11 is incomplete and covers through 1/9/2009.)

Individual apps also have release dates, which based on Apple's recent changes to the app store, represents the date developers upload their apps to iTunes Connect. The period between the release date of an app and the date it first appears in iTunes is when Apple performs a series of undisclosed QA tests. Because it translates to a more favorable position when users sort by release date, most developers prefer this incubation period to be as short as possible.

In the graph below, I measured the MEDIAN incubation period in Sep/Oct and Nov/Dec. (Note: For each app, I used the release date published when the app first appeared on iTunes.)

There were more than 5,000 new apps introduced to the U.S. iTune store in each of the two-month periods. The categories are sorted according to the number of apps (see a related post or this chart from early December). The top 8 categories account for over 70% of all apps, with a quarter of apps coming from Games. For all but two small categories (Weather, Social Networking), the incubation period has declined. (Medical is a new category and wasn't represented in Sep/Oct.)

While the average incubation period is declining, some developers still experience, what they consider, unnecessarily long delays. If you are an iPhone app supplier/developer, I welcome your thoughts on this subject.

iTunes App Store: The First Five Months

by Ben Lorica | @dliman | comments: 14

Taking a cue from Raven's recent post announcing the 10,000 iPhone app milestone, I decided to update some charts from earlier posts on the U.S. iTunes app store. First, the weekly growth in the number of apps was slower in November: the number of apps grew less than 10% on a weekly basis for all of November. During the last week of November, there were close to 9,800 unique apps, 22% of which were free.

The average price of a Top 100 paid app continued to decline, falling to a little over $2.60 in the last week of November:

Since high-priced top-sellers actually inflate the MEAN price, I created an alternate chart using the median (the decline in the MEDIAN price is even sharper). The corresponding price distribution continued its downward shift as it becomes harder for high-priced apps to crack the Top 100 paid apps list.

Having more than doubled over the last two months, Gaming remains the largest category accounting for a quarter of all apps. The fastest growing categories were Education and Lifestyle. Medical is the newest app category and as of the end of November there were over 80 medical apps, the 10 most popular of which were free. Among Game apps, Racing, Music, and Sports were the fastest growing Game sub categories.

There has been a slight increase in the proportion of Games priced at 99 cents or lower:

Finally, I computed the share of free apps by category and found that some of the smaller categories have a higher share of free apps. Social Networking apps tend to be apps designed to help users access social web sites from their iPhone, while News apps do the same for news/media sites. In both the Social Networking and News categories, the Free outnumber the Paid apps.

I didn't revisit my previous analysis of the top-selling apps, but I suspect not much has changed since my post at the beginning of November. Among the items I do hope to cover in the future is an analysis of app publishers.

John Doerr on the iPhone as a Gaming Platform

by Ben Lorica | @dliman | comments: 0

At the Web 2.0 summitt, John Doerr mentioned the high number of games available in the iTunes App store, and wondered whether the iPhone's potential as a gaming platform is being underestimated by Sony and Nintendo. His interest stems from KP having funded a company that develops free and paid games available through the iTunes store.

I decided to pull together a few charts that give an overview of gaming in the iTunes store. The share of game apps has grown steadily and hovers around 25% of (the now more than 6,000) apps available:

As the largest category, Games has several sub categories. The number of apps available in all but three of the gaming sub categories doubled over the last 8 weeks:

Finally, Free games only accounted for 19% of all games in the most recent week and close to three-quarters cost $1.99 or less:

UPDATE (11/12/2008): The Wall Street Journal reports impressive numbers for a few iPhone and iPod Touch games

Apple keeps 30% of the proceeds of software sales through its App Store clearinghouse. But even with that split, "games sold via the App Store are the most profitable in terms of any of the formats we work on," said Simon Jeffery, the U.S. president of Sega. Sega has sold more than 500,000 copies of a $10 game called "Super Monkey Ball" for the iPhone and iPod touch. The game, in which a player navigates a rolling orb around mazes by tilting the device, has reached a sales level that Sega says would be considered a hit for a DS or PSP game, which can cost up to $40.

... So far, Mr. Decrem has had more than 2.5 million downloads of a free music game called "Tap Tap Revenge," where players tap and shake their devices to the beat of popular tunes. Now the Palo Alto, Calif., firm is selling ads in the game to sponsors such as car maker Jaguar and Comedy Central. It has also released a $4.99 version featuring the rock band Nine Inch Nails.

iTunes App Store Categories and the Top-Sellers

by Ben Lorica | @dliman | comments: 7

I previously looked into the Top 100 Paid apps (henceforth known as the top-sellers) and found that their average price has been declining. In this post, I'll examine which iTunes categories^† are producing the most top-sellers. In terms of number of unique apps, all the categories have grown rapidly over the last two months, with Sports, Education, and Entertainment posting the highest growth rate.

In the absence of download information, the popularity rankings are the best available proxy for "sales": frequent appearances on the Top 100 Paid Apps list is a good indicator that an app is selling well. Having access to data from around the launch date of the iTunes store, I was able to focus on apps with longer track records (at least 60 days old). The number of days an app spends on the Top 100 list varies across categories:

Of the categories that produce top-sellers, Music was particularly impressive. On average, the 15 Music top-sellers analyzed were on the Top 100 list on 30 different days. (The one Weather app appeared in the Top 100 on 58 different days.) I used duration to see which categories had more proven top-sellers. Solid top-sellers have appeared on the Top 100 Paid apps list on at least 20 different days, while Marginal top-sellers have appeared in less than 10. The Marginal top-sellers have a short-term burst in sales, and are hits for only a few days.

Some categories tend to produce Solid top-sellers (e.g. Music), others produce mostly Marginal ones (e.g. Productivity).

Besides overall sales, Solid and Marginal top-sellers differ in terms of sales velocity (number of days it takes to land on the Top 100 Paid Apps list). On average, a Solid top-seller appears on the Top 100 list the day it launches. It takes a typical Marginal top-seller 5 days to achieve the same milestone. So if an app lands on the Top 100 list quickly, it's also more likely to appear on the list frequently.

With an estimated 7.5 downloaded apps per device, iPhone users are happily experimenting and searching for useful software. While the Top 100 list is a convenient shortcut, savvier users in search of apps do so within categories. Someone in need of a mortgage app will need to navigate within the Finance category. As this short list of top-sellers illustrates, the Top 100 list is a bit like the Billboard Hot 100: it's heavy on the pop side.

(†) While apps can be listed in more than one category, the vast majority (≈ 97%) are listed in only one.

The Top Paid Apps in the iTunes App Store

by Ben Lorica | @dliman | comments: 5

With the recent launch of the Android app market, I thought it would be a good time to give a quick update on the iTunes app store. For now, there are only a handful of apps in the Android market. Developers will be able to start uploading their apps this coming Monday. In the meantime, the rival iTunes app store keeps growing: there are now well over 5,000 apps.

To put the growth in number of apps in context, I decided to look at our data on the Facebook and Myspace platforms. Unfortunately, we got off to a later start in tracking Facebook and Myspace so the graph below corresponds to growth well after their launch dates. While not an exact comparison (data for the iTunes App store is from launch), the resulting graph is still impressive:

I had an earlier post where I talked about the various categories of apps: nothing major has changed on that front. I will do an updated post on categories and other app store topics, but for now I'll focus on the Top 100 paid apps. Since iTunes highlights the Top 100 Paid apps, making it onto that list translates to free exposure.

The Top 100 rankings change constantly throughout the day. They are based on "popularity", but I haven't been able find details of how the rankings are computed (and how often). In any given week applications cycle in-and-out of the Top 100. On average (over the last four weeks) about 136 different apps spent time in the Top 100. But in recent weeks there has been a small decline in the number of apps that made the Top 100:

The average price of a Top 100 paid app has been declining steadily. In mid-August, the average was around $4. Recently, the average price of a Top 100 app was down to about $2.80.

The decline in average price is not just due to expensive/outlier apps dropping out of the Top 100. The corresponding price distribution has been shifting downward slowly over time as it has become harder for high-priced apps to crack the list. Other notable characteristics of Top 100 paid apps:

An app can be in-and-out of the Top 100 list over several weeks. On average, an app is on the list on 4 separate calendar (Monday to Sunday) weeks.

On average an app cracks the Top 100 list sometime before the end of the second calendar week after its launch.

Revenue is harder to estimate without number of downloads/installs. If one had download data on enough apps, then a statistical model could lead to estimates for the rest.

We will continue to track the iTunes app store and post interesting trends here on Radar. The app store has clearly intensified interest in the iPhone. Apple sold over 6.8M iPhones last quarter, and Q4 revenues for the iPhone were up 583% compared to the same period last year.

Sneaking Around With Other People's Platforms ... and a Countdown to Graphing Social Patterns West

by Dave McClure | comments: 3

Last summer, I fell in love. Please don't tell my wife.

This spring, i'm taking another lover. Please don't tell Facebook.

I'm not alone. Ask any alpha geek in Silicon Valley. They're all double-timing on Other People's Platforms every chance they get. I've spoken to dozens of pasty-faced coders, and every last one is pinching themselves to make sure it ain't a dream, they never had it so good. I'm telling you, folks: there hasn't been a market for eggheads this strong since Italy in the 14th century.

Developer Renaissance: Sistine Apps

If you're a web developer or recent computer science graduate, these are most certainly the best of times. With the groundbreaking launch of Facebook Platform last year, and the subsequent emergence of multiple new [open] social platforms this year -- MySpace, Bebo, hi5, Friendster, Ning, Meebo, LinkedIn, etc -- we are experiencing a Geek Renaissance the likes of which the software community has never before seen.

While there have been notable spikes of technology innovation on new software platforms in the past -- DOS in the 80's, Windows in the early 90's, the browser & the Internet itself in the mid-to-late 90's -- the recent explosion of both users and developers active on multiple social networks and platforms is unparalleled. These multiple platforms make this Brave New World such a competitive and fast-changing landscape.

Consider this: In just a few short years, MySpace and Facebook have come out of nowhere to become Top 10 Internet properties, with hundreds of millions of users and billions of monthly page views. And in addition to those two juggernauts, there are seven or eight other social networks among the top 25 sites worldwide. Several of them have also launched their own social platforms. Even Google entered the fray last fall by announcing Open Social, not a platform per se but rather a common API framework for building other social platforms (aka "containers") and applications.

In short: it's ON. That is, a massive global competition for the bits and minds of nerd-dom and every socially-enabled application on the planet has begun.

One Man's Viral Loop is Another Man's Spam Soup

So why all this attention to social platforms? Because social apps appear to be the most amazing viral and infectious method for acquiring new users quickly. The breakout growth of a number of Facebook apps in the past year -- several of which topped a million installs in just a few weeks, sometimes days -- demonstrated that integrating social network connection data into traditional software applications enables astonishing levels and rates of customer acquisition.

On the other hand, such a high level of viral customer acquisition appears to (currently, at least) be driven by a rather "spammy" invitation process, which can also have negative effects on user experience and cause "app fatigue". (Note to Facebook and others: why not dial up virality and discovery via the News Feed? What are you waiting for?) Viral distribution and user engagement aren't mutually exclusive, but it does seem that most apps tend towards one or the other -- with the notable exception of "social games" (ex: Scrabulous, Warbook, Oregon Trail).

Social Graph Clone Wars

Just as apps compete for user attention, social platforms are now also competing for developer attention using a variety of features and levels of enabled distribution (virality), engagement, and monetization. Platforms will now compete for developers by offering alternate strategies for differentiated reward -- and at the same time, those same platforms will have to make decisions about how committed they are to preserving a "happy" user experience that limits spammy app invitations and notifications.

On this particular point, Max Levchin, Founder/CEO of Slide.com, has written a tour-de-force essay on game theory for social platforms, and how platforms should structure developer incentives to drive growth. It's one of the best thought pieces i've read all year. I encourage you to check it out.

See the Apps @ Graphing Social Patterns West (March 3-4, San Diego)

I also encourage you to check out Graphing Social Patterns West, O'Reilly's newest conference on the business & technology of social platforms, coming up March 3-4 in San Diego (co-located with ETech). If you are looking for one conference that covers social networks from top to bottom, this is it. We will have keynote presentations from Google, MySpace, Facebook, Yahoo, and Forrester Research, and a ton of innovative startups and developers discussing marketing strategy and technical architecture for people building on social platforms. I hope you'll join us for an amazing journey and conversation.

(note: App developers who enter the GSP West AppNite Live Demo Contest can register for 50% off the normal conference fee)