Tapjoy shifts focus to personalized app marketplaces

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Six months after Apple (NASDAQ:AAPL) began aggressively rejecting iPhone and iPad applications that offer incentives--e.g., virtual currency--to encourage users to download other apps, Tapjoy continues to evolve its platform away from its original pay-per-install monetization and distribution model. The startup is now reinventing itself as a personalized app marketplace, promising consumers customized application recommendations based on their likes and dislikes, the apps they're currently using, apps that are popular among their friends and other predictive factors.

The web-based Tapjoy marketplace supports is accessible from any mobile browser--the platform identifies each user's smartphone and its installed applications, leveraging social media connections, newsfeed updates, Tapjoy editorial reviews, customer feedback and related tools to offer personalized suggestions. Users can accumulate virtual currency by installing sponsored apps, watching videos, subscribing to services and purchasing discounted products--consumers can also earn rewards by actively engaging with ads from Tapjoy Mobile Value Exchange partners including Netflix, Gamefly, Groupon, Intuit, Discover and FTD.

Apple began cracking down on pay-per-install schemes in April, contending that the model violates section 3.10 of its App Store Review Guidelines, which states "Developers who attempt to manipulate or cheat the user reviews or chart ranking in the App Store with fake or paid reviews, or any other inappropriate methods will be removed from the iOS Developer Program." Tapjoy responded to the ban by expanding its services to include advertising while also shifting its focus to rival platforms, most notably Google's (NASDAQ:GOOG) Android. In July, the firm completed $30 million Series D round of funding led by J.P. Morgan, with existing investors Rho Ventures, North Bridge Venture Partners, InterWest Partners and D.E. Shaw Ventures also contributing. The new funding followed half a year after Tapjoy raised $21 million.

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