Developers See Dollars In Android Improvements

Getting paid on Android (s goog) has been a touchy subject for developers, who have had trouble turning their apps into big money-makers like their iOS (s aapl) counterparts. But now that Google has finally rolled out a new web store for Android Market, support for local currencies, and in-app purchases for Android apps, developers are hoping to kick-start revenues.

The web storefront of the Android Market, first promised last May, brings the ability to search, browse and buy apps from a computer browser. Up to now, mobile apps would be purchased directly through the Android Market store on devices or through independent app stores such as AppBrain and GetJar. The new Android Market provides a very Apple-like App Store interface with categories, lists of top free, paid and featured apps along with screen shots and video demos. Customers who buy an app will have it pushed out to their device through a Wi-Fi or mobile broadband network. And they’ll be able to share links to apps in Android Market now through Twitter.

The other major improvement is in-app purchases for Android Market apps. Some payment providers like Zong and Boku have either deployed or tested similar systems on Android apps. But this is Google’s first move toward offering native support for in-app purchases for virtual goods and extra content inside Android apps. Developers who integrate the feature can offer one-click payments through Google Checkout or carrier billing from AT&T (s t) and T-Mobile. In-app payments will roll out to consumers by the end of this quarter. 

This is clearly the bigger announcement for developers because it brings a huge new revenue source to Android app developers. In-app purchases have proven incredibly lucrative to Apple iPhone developers, who now make almost as much money from such purchases as they do from paid downloads. Selling from within an app gives Android developers a new way to make money outside of traditional advertising.

Matt Hall, co-founder of Larva Labs, one of the early developers in Android Market, said to me today that he’s excited about the changes and believes they’ll help monetize new and older titles. Larva Labs has been sitting on a Facebook photo wallpaper app that Hall said will launch with Google in-app purchases. He expects to apply in-payments to most of Larva Labs existing apps as well.

“In-app payments look great,” said Hall. “It needs to be that almost any Android user should be able to purchase something with a click. Anything you can do to make the process seamless really helps with conversion.” Hall, however, is hoping to see more carrier billing options, suggesting that for some, it’s a simpler way to pay for things than Google Checkout.

Andrej Nabergoj, CEO of Outfit7, which makes a series of Talking Friends apps, said the new in-app purchase feature will help close the revenue imbalance between its apps on iOS and Android, which produces far less in sales for Outfit7. The company has recorded more than 60 million downloads on both Android and iOS. For its free apps on iOS, Outfit7 has been able to convert 10 percent of customers to the paid version of the apps through in-app purchases. That option will finally come to Android for the first time when Google makes it available, Nabergoj said.

“We have 20 million downloads on Android and it’s growing really well. But we have a really hard time monetizing it,” he said. “I have a lot of confidence that in-app purchases will help monetize that audience.”

Mike Breslin, vice president of marketing for game maker Glu Mobile, said the move to in-app purchases also plays to Android’s history of selling more free apps. Instead of trying to push paid purchases up front, Breslin said developers can stay free, get a lot of downloads and try and pick up sales later on.

He said freemium has been a huge paradigm shift in mobile gaming and it’s remaking parts of Glu’s business. Games like Deer Hunter Challenge and World Series of Poker are now making more money as freemium titles than they did when they were paid. Breslin said the move to freemium will not only help existing developers but should make Android more of a destination for serious game developers, one of the knocks against the platform compared to iOS.

“It’s really exciting news for anyone in the content business,” Breslin said of in-app payments. “Especially social mobile gaming companies like us, our entire games are built around freemium. When you can monetize a channel, it’ll bring better quality products and more often.”

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