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Google Wants to Turn the Tables on Apple in the App Business

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Mar. 13 2019, Published 9:33 a.m. ET

Google wants to help developers make more money

Alphabet’s (GOOGL) Google is introducing a new feature designed to expand monetization options for Android developers. The feature is called Rewarded Products, and it allows Android developers to make money even from free users of their apps. Via this feature, free app users watch a video advertisement, and after that, they’re rewarded with points in the form of virtual goods or in-game currency.

With Rewarded Products, Google is trying to help Android developers generate more earnings from their work. At the moment, Apple’s iOS platform is where the money is for app developers. According to the latest report from Sensor Tower, the iOS platform generated $46.6 billion in app revenue in 2018 compared to the $24.8 billion generated by the Android platform.

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Trying to be nicer to developers

There’s tight competition for app developers among app store operators such as Google and Apple. As a result, these companies are trying out various ways to make their platforms more appealing for developers. Apple, for instance, is considering an overhaul that would allow developers to create an app once and have it run on any device—whether that device is an iPhone or a Mac computer.

App store operators take a cut of the app sales made on their platforms, so their encouraging more developers to come to a platform expands their revenue opportunity. Google parent Alphabet reported revenue of $39.3 billion in the fourth quarter, an increase of 22% YoY (year-over-year). Revenue jumped 39% YoY at Yandex (YNDX) and 22% YoY at Baidu (BIDU) in the same quarter. Microsoft (MSFT) and Facebook (FB) recorded revenue rises of 12% and 30% YoY, respectively, in the quarter.

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