'Cut the Rope' for Free Helps GetJar Challenge Google, Apple

Many "free" apps such as the version of Rovio Mobile Oy's "Angry Birds" on GetJar make money for developers from tiny embedded ads, similar to those on Google sites. Such ads will provide less than 10 percent of application revenue that is expected to reach $9 billion this year from handset and Google stores alone, said Stephanie Baghdassarian, an analyst at Gartner Inc. in Paris.

Free Apps

Free applications will account for 86 percent of downloads from the stores of Google and handset makers this year and more than 88 percent in 2015, according to estimates by Gartner.

"We're in favor of free and open systems in every way," Laurs said in the phone interview. "We don't think developers should have to pay a tax on downloads or future commerce through their apps, or accept restrictions."

Other application stores such as Apple's encourage developers to charge for downloads and then take 30 percent of the revenue. While saying this may be attractive for small developers who want help with marketing and revenue collection, Laurs called this a "tax."

Many applications are mobile extensions of existing businesses that operate over the Web, such as airlines, banks, and communications and social networks such as Facebook and Twitter, Laurs said.

'Angry Birds'

The free model is suitable for applications linked to existing businesses because the companies can then sell apps and other products to users without worrying about fees, he said. It is also a better model for users who don't have a convenient method to make payments, he said. GetJar gave up on charging for apps in 2006.

via sfgate.com