The issue of paid apps vs. ads is complex.

The big issue I see is the pay-once-support-forever model. I guess it
would be ok if you have a game that doesn't require any backend
services, you just have to suffer with the idea that you'll never
increase your income from the app unless you have download
acceleration. If there is a server involved though, the equation is
totally different. Those users who pay once will be sucking bandwidth
and CPU cycles forever and you'll never reap any financial benefit
from them again, they will be as valuable as dirt from the Love Canal
(http://en.wikipedia.org/wiki/Love_Canal).

Advertising income, while small, is constant and increases as your
install base increases. It can go on as long as your app is in use.
That is the real benefit at this point. Until there is a subscription
model available under the Android Market terms, advertising is the
only rational way to generate a revenue stream from apps. Funny how
that is, Google is in the advertising business, not the app selling
business. Do you think there could be a connection? Naaaaa.

-John Coryat

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