Last week, myYearbook acquired five new Android apps. The company also noticed some changes in app ranking, and CEO Geoff Cook shared some thoughts about it with WebProNews.

“We believe the new algorithm takes into account a measure of activity in the application and not simply new installs per day,” he tells us. “Particularly, we believe the ranking now considers either Daily Active Users (DAU) or the ratio of Daily Active Users to Monthly Active Users.”

“This conclusion appears to be borne out by the fact that other apps known to engage users well, which would be expected to have relatively high DAU/MAU ratios, also increased in rank during the same time,” he adds. “Apps that benefited from the change, like ‘myYearbook for Android,’ are much more engaging for users than those that suffered, like ‘Tic Tac Toe.’ Another example, in the Social Free category, Seesmic went from #39 to #10, and Gowalla went from #78 to #18 – all virtually overnight.”

Note that Tic Tac Toe is among the five apps acquired by myYearbook.

He thinks the ranking now considers either daily active users or the “sticky factor“.

“The ‘sticky factor’ is a measure of how frequently someone returns to your application, and is the ratio of Daily Active Users to Monthly Active Users,” explains Cook. “The more engaged a user is, as reflected by their likelihood to visit that day, the easier it is for app developers to monetize them.”

“Developers care deeply about DAU as that is the core audience a developer can delight and engage (and monetize) in any given day. DAU/MAU tells you of all your monthly users, what percentage logged in that day,” he says.

He also says he thinks it is related to in-app billing, which Google recently launched. “With in-app billing, it is now in Google’s best interest to highlight more engaging apps, as those apps are more likely to generate paying users,” he says.

“More engaging apps have users who return to the app with higher frequency,” says Cook. “You are more likely to pay to use such an app than you are to pay to use an app that you only visit 1 or 2 times a month. As a result, engaging apps are more likely to generate paying users. As rankings that depend on DAU and retention reward good apps with more users, it encourages the entire app development community to focus on improving engagement – not just spamming users or buying low-quality installs.”

This has been a common way for developers to get their apps a boost in Android Market visibility. Kind of like link buying.

“We think the change is clearly a good thing for users and for creators of engaging applications, but it’s not a good thing for everyone,” says Cook. “In particular, less game-able rankings mean that simply buying 50,000 low-quality, incented installs doesn’t guarantee you a top ranking anymore. If you had optimized your app for new users rather than returning users you may have dropped in the rankings. I think most app developers expect constant change and this change, in particular, is a welcome one. We’d love to see Apple’s App Store rankings depend on engagement as well.”

As mobile apps continue to flood the markets, and more people get smartphones and tablets, search quality within these respective markets will only become more crucial. Google still has a lot of work to do. A search for “social media” on the Android Market, sorted by “relevance” lists a Major League Baseball app at the top. No signs of Facebook or Twitter on the first page.

Facebook, long in second place but up 32%, pulled in nearly 15% of US social networkers, a share that towers over its nearest competitor’s.

That nearest competitor is one may not have heard of, but in the past year it has seen meteoric growth to grab a market share greater than Bebo, the traditional third place network recently acquired by AOL. MyYearbook.com grew by 475% to claim 1.33% of the US market, compared to Bebo’s 1.09 percent.

On its homepage, MyYearbook boasts just over 66,000 members, but 15,000-plus signed up just today.

The numbers show not only how the third-place spot is pretty much up for grabs by a spry newcomer, but also that there may be a ceiling set in place by both Facebook and MySpace. And if MySpace loses another 5% next year, that’s some trickle-down dominance available to just about anybody.

Though the entire social networking category is down 16% over all, Hitwise research director Heather Dougherty says loyal networkers are speding more time at them. "The growing number of applications and amount of content available for social networks are driving higher average visit times for the category, providing marketers with additional opportunities to reach these active users."