commentary Microsoft CEO Steve Ballmer yesterday appeared to hint at the possibility of a Windows application marketplace that would be similar to the Apple iPhone AppStore. But the idea is not without its share of problems.

For the full video of Ballmer’s Sydney speech on Thursday click here.

Speaking at Microsoft’s Power to Developers event in Sydney this afternoon, Ballmer said that Microsoft had debated long and hard about whether to disclose details about an application marketplace offering at the recent PDC conference.

“Fear not, we are hard at work and have similar concepts”, said Ballmer. It remains unclear, however, whether he was referring to plans previously reported to create an app store for Windows Mobile, which Microsoft has reportedly dubbed ‘Skymarket’.

He said that both Apple and Facebook had done a good job with their application marketplaces by making it easier for developers and that it was no easier than creating freeware, but that it was easier for developers to gain exposure.

Too much of a good thing
The idea that Ballmer is touting is not without merit — the problem lies in the sheer size of ecosystem that a Windows AppStore would have to serve.

Being the monopoly player in the IT industry, Microsoft’s application marketplace and delivery mechanism is the industry itself.

Cataloguing the plethora of software available from DOS to Windows 7, Windows Mobile and now Windows Azure is mind-boggling. It may seem logical to divide the software by platforms, but as Ballmer said himself today, one of Microsoft’s goals is to unify the experience between different devices for users and developers.

Imagine the size of a games channel within a Windows Appstore — making the experience and navigation pleasant for users is likely to be one reason why Microsoft are keeping this project under wraps for the moment.

Another issue is egalitarianism. All development houses, regardless of size, are going to want to be in the AppStore; but would Adobe accept having Photoshop displayed in the same fashion as university students’ quickly made “PaintPlus” product? In this scenario, it is likely that gaming of the ratings system would occur. Disgruntled users of Photoshop would be likely to score the application down, while PaintPlus would only need to have a handful of good reviews to appear more highly rated than the industry-leading Photoshop.

Featured and sponsored applications could alleviate this problem somewhat but that would then create a money battle that would be familiar to users of Google’s AdWords system.

It’s quite a dilemma for Redmond; trying to appease all segments of the industry will be hard. It works for Apple and Facebook currently because their software catalogues are tiny by comparison and their platforms are singular.

It is worth remembering that a camel is a horse designed by committee, and what is certain about Microsoft’s decision on this issue is that it is going to have to be compromised to serve the entire industry. It will not be a perfect design, nor a perfect marketplace.

Microsoft’s AppStore to more likely to retain fat and snort than become the beautiful thoroughbred we imagine.