Last week, a number of reports suggested Apple had silently tweaked its algorithm that handles ranking of App Store applications, giving more importance to the quality and usage stats of an app rather than simple download numbers. The tweaked system, never confirmed by Apple but noticed by several third-party App Store ranking engines and advertising agencies, had its effect mostly on free apps in the Social Networking and Games categories, with the Facebook iPhone app quickly climbing to the first spots of the charts after months of sitting in the 10-20 positions. At the same time, Apple also began rejecting updates to applications that implemented “pay-per-install” methods – a system that, especially in iPhone games, allows you to earn virtual goods and currencies by downloading another app from the Store. As noted by pay-per-install and advertising network Tapjoy, the rejections came as Apple apparently started enforcing section 3.10 of the App Store Review Guidelines, which doesn’t accept developers who “attempt to manipulate or cheat” the App Store’s user reviews and charts. In this case, apps powered by pay-per-install options manipulate the charts as users go download additional software not for quality or particular interest, but just because they want to unlock the virtual goods.

At the VentureBeat Mobile Summit, Tapjoy CEO Mihir Shah said the company rolled out last week a cap on how many times an application can be downloaded through Tapjoy’s programs. Details on the cap aren’t clear, but it sounds like the new strategy is aimed at complying with Apple’s rules in a way these “offerwall” programs don’t manipulate the charting algorithm of the App Store, yet providing some exposure for Tapjoy’s advertisers. Admittedly, whilst advertising has always been a part of the Internet and it doesn’t surprise anyone that a company pays money to get exposure, having certain apps ranking higher in the App Store only because they invested more in pay-per-install methods doesn’t exactly sound great. If Apple wants to promote quality rather than download numbers, they have every right to rebuild their garden’s walls – as I stated previously. Tapjoy is yet another third-party company that had to change its service to keep up with Apple and the App Review Team. mocoNews concludes its article on Tapjoy with this quote from the company’s CEO:

Still, app developers should have some flexibility to market their applications within other applications, Shah said. “There has got to be a number of very creative long-term ideas that impresses a balance between marketing spend and organic rankings,” he said.

Creative ideas, as Shah calls them, clearly can’t come from paying money to gain visibility in the App Store. Rather, I believe Apple would see developers investing more in iAd for apps, or clever techniques to team up with fellow developers and promote iOS apps together. But right now, pay-per-install networks have to change.