Looks like a rather good deal to me. Being backed by Instapaper automatically gets you a lot of users. What would be the chances for any indie developer to get half of those users without Instapaper's support ?
- users that have heard of Instapaper and need an app that does what this does. When they need an app that does a certain thing, the majority of the users will pick the popular brand.
- users that have switched from an iPhone recently and have been using that
- users that have seen the app on a friend's phone
etc ...
Seriously now, if you built a game now, and got EA Games to publish it for you, wouldn't you like to get 50% of the profits? Not anyone can build a minecraft
Case 1 and 3 would be new business, you'd still have to convince those users that Instapaper is right for them, there's nothing automatic about it. Also what makes you think Instapaper is the popular brand on Android?
Case 2 I'll concede but that's hardly "a lot" of users.
> Surely not the ones using the Instapaper iPhone app...
Of course those as well, when times comes to change devices, keeping existing services is an important factor and may make or break the decision to switch from $CURRENT_PLATFORM to $OTHER_PLATFORM.