Releasing an API can make you more money

So facebook have released an API earlier this week (surprise surprise I'd already signed up within 6hrs of launch, more to come), I just can't see the revenue upside for them in this esp. given their generous call limits. This confusing facebook API is a neat segway into the flipside of the post I made earlier this week saying natural search APIs are poorly supported due to the lack of revenue upside. For me the power of a lot of sites is in the platform they offer and the fact that this platform is their revenue base. APIs that enable use of a platform to make the API owner more money are the best supported tools out there. Let's look at 2 examples: the eBay API, and the typepad API.

Starting with the first last I am writing this post through the typepad api using the great windows live blogging tool and you know what? Typepad simply don't care since I pay them for using their platform. Switching costs are pretty low for me on blogs. I have written my own blog software based off a database which I still own and works pretty well, I can use wordpress or blogger too and Typepad allows me to download all my listings in a datafile. My domain name is actually hosted by namesco (who I love but that's another story) and just DNS mapped to this namespace (easy to change), basically apart from a few small technical hurdles I could move my blog over night. I don't however because the typepad system is great and they keep on making it easier for me to use them with the blogging tool as an extension of their platform through the API being a key example. Offering out their API is helping to keep me a loyal customer by allowing anyone to develop for me the tools I need/want and they must know this since the API is free.

eBay's API is awesome. I love it and I keep saying it (much to the embarrassment of my colleagues). Without the eBay API such companies as channeladvisor and marketworks probably wouldn't exist and the new startup I read about today certainly would not. The beauty of this API is simple, eBay makes money wherever and however users buy and list so long as they use the eBay platform to do it. There are more and more examples of how eBay is cropping up all over the web wherever people might partake in e-commerce. This API strengthens the core platform and hence is totally free to use up to 1.5million calls a day if you certify (which is also free).

I am a passionate fan of forward thinking corporations/companies who use API's to their advantage. I think it makes the most sense when the companies have a really useful platform and they make revenue from that platform detached from their pure website. In summary if you want to make money from an API for your really useful website make sure it's users interacting with the platform that's valuable for you and not visitors to your website.

I really wanted to shout about the Adwords and AdSense API's here today and Yahoo's upcoming Panama but there just wasn't enough room. Another post coming soon.

Comments

[dinash mia]

Thank for the great article. I can learn something new today from your tips.

[John]

Look for the next best thing and make your move. Make money fast.
- http://web.ecomplanet.com/WEAL2336/

[Alex]

I guess stacked API's are totally doable but on the eBay side I'd ask the DTS folks via the developer site because I have no idea if it is allowed.

With widgets and so on though effectively their are tonnes of stacked API's going on... sounds like a great idea :)

Thanks for the comment.

[Erik]

Great post, and thoughts, on API's. Obviously, our little tool wouldn't be much use to anyone without eBay's API. They're open-minded enough to create an API, understanding that both of us will make money off of it. What hurts is when they let you develope for their platform, then take your idea and leave you with nothing (we did that with eBay stores a couple years back).

Anyway, what's interesting too is when you think about creating an API for a tool like List'd that allows other developers to take advantage of our direct plugin with eBay. Stacked API's? Can you do that? :)