Is the app economy killing online publishers?

A few months ago I tweeted this: “If I were a publisher I would either: a) pull my app from the App Store or b) invest all available cash in Apple (s AAPL) stock.” The latter piece of advice was probably pretty solid, if not very practical — Apple’s stock has been performing like no other in recent history.

But my former piece of advice for publishers – to pull their apps from the App Store – doesn’t seem to have resonated much, as many publishers keep pushing out their respective iPhone and iPad apps. That said, I’m betting this trend is a short-term fad that will eventually reverse, and here’s why:

The fragmented app world is a drain on development resources

The beauty of the Web is that it standardized access to information across machines, operating systems, and browsers. No more rewriting code to be Mac-, PC- and Unix-compatible, etc. Publish once on the Web, and the information will be accessible by all of humanity regardless of any configuration they might use to access it. Recently, the various app stores have again started fragmenting a world that had largely become defragmented. A fragmented dev world imposes costs and headaches on those that choose to support the various apps. That might not be a huge tax on tech companies, per se, but for publishers, supporting multiple apps will become a headache and a totally unnecessary tax, which leads me to my next point.

For most websites, the ROI of an app is unclear

A native app is a great way for developers to create functionality that’s not possible with a web page (or that might otherwise require the use of Flash in a web page). Games are a perfect example of this. For a publisher whose product is words and pictures, it is unclear what additional functionality an app can provide that a well-designed Web page cannot. Sure, it’s always possible to slap some artificial stuff on an app (and The Daily is a great example of things that can be done on a publisher app), but the question is whether those things are done because it’s possible to do them, or because they are actually useful.

I’d argue that the most useful mobile reading experience is on Instapaper, which is a clean presentation of the text with proper typography — attributes that are all perfectly achievable in a well-designed mobile website. The only two exceptions here might be: a) video and b) offline reading. The gap on both is closing with HTML5, and soon even these “app excuses” won’t be a valid reason for justifying development of proprietary mobile apps.

You can’t link — or, at least, link easily — to apps

When deciding to publish content in an app rather than a mobile website, it’s important to understand that the value of links, as we know them on the Web, is greatly diminished. Because an app is a standalone program, not a part of the open Web, linking to other pages is clunky at best. You cannot link to content on other apps. And links to websites, while possible, require switching the user to another application (AKA a mobile browser) and disrupting the user experience between articles.

You’re being held hostage on someone else’s platform

Lastly, and possibly most importantly, is the ownership of the platform on which you publish. No one owns the Web, and therefore no company can impose new rules, pricing, censorship or other surprises along the way (FCC regulation aside, of course).

When developing a mobile app, a publisher technically becomes a node within someone else’s platform — namely Apple or Google (s GOOG) — and is bound by their rules and whims. Apple’s decision to impose a 30 percent tax on all publisher subscriptions done within apps is just one example of this. The Financial Times created a lot of buzz with their decision to fully withdraw from the App Store and go all-in with their mobile Web app. Developing an app for someone else’s platform might give the illusion of a new marketing channel, but in reality it means becoming a node in someone else’s business model.

All that said, a mobile app can be a decent marketing channel, and there is value for publishers in having a presence inside the various app stores. But if you peel away all the other layers of what an app can be and focus on it exclusively as a marketing channel, then the conclusion is that an app for publishers is basically a bookmark on people’s phone screens. That’s it — a reminder to consume the publisher’s content, and a quick link to do so.

I urge (and predict!) that publishers stick to these principles after the “we need to have an iPhone/iPad/Android/WebOS/Win7/etc. app” hype passes:

  • Use limited dev resources to build a single, great mobile Web version of their website.
  • Submit a bookmark version to all the app stores of an app that launches the Web browser with their mobile Web site.
  •  Use services specific to mobile, which provide readers a superior browsing experience, tailored for the mobile Web.
  •  Alter monetization strategies for the mobile environment, opting for revenue generators that are perfected for mobile consumption.

Mobile is putting pressure on publishers to quickly adapt and successfully deliver. In a “sink or swim” environment, the hype of apps is ultimately going to weigh publishers down. There is no real reason for publishers to spread their dev resources thin, supporting multiple proprietary apps that break links and really serve someone else’s strategy more than their own.

Yaron Galai is the CEO and co-founder of Outbrain, a web-based recommendation engine. 

We’ll discuss the app economy, its rise and possible fall, and the opportunities presented by HTML5 at our annual Mobilize event in San Francisco, September 26 and 27th.

Image courtesy of Flickr user Sean MacEntee.