Web Service Developers are Making Money

Filed in archive Web Services on September 21, 2005

There are a number of Web Services APIs out there now on the web for use by entrepreneurial developers. The first three that readily come to mind are EBay, Amazon and Google. With these APIs any developer could simply register for a developers license and start using the services provided. At first I didn't understand why a company would want to expose this type of functionality to outside developers but then it became very obvious to me and to be honest I felt kind of stupid for not seeing it right away.

By exposing the web services API to the developers on the Internet the company involved is simply generating my traffic to their product. For example EBay can offer their APIs to be used so customers can search their product base and potentially purchase an item. Here the developer of the interface gets a commission because they directed traffic to EBay. EBay or Amazon make money because of the increased traffic generated to their site and the increased number of sales that then follow.

The Web Services developers are creating something unique for the companies that expose their API to developers on the Internet. They keep the sales of items on their systems but allow these new developers to do things they would not have thought of themselves. The value both parties provide to each other becomes very obvious. So in this case hackers (the good kind) are leading the way to innovation

I've had the opportunity to use each of the before mentioned APIs. The one additional thing I have to say on the subject is that with the provided tutorials and documentation each is fairly simple to use. However, The EBay API is the most complex to use I've found.

I was a little disappointed with the EBay developer program. The reason for the disappointment is because of the fees that EBay charges a developer in order to use their system. In order for a developer to get a license to their production system EBay is charge $500 per month. However, a license to use their "Sandbox" system is free. Also EBay requires a one-time review of any application used to interact with their production system and charges $200 for such a review. I've heard the stories about EBay being aggressive in pursing profits but in this case they may be going a little too far.

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Response from: Phil (09/23/05 5:30am)

This is an interesting article, but I'd like to see someone write about the other side of it- time wastage. It's a little disconcerting to go on the web and search for a particular item, say, a "Jet Lathe" (something I was searching for recently) and realize that 90% of the sites that have "Jet Lathes" are actually re-listing Amazon.com's stuff on their site for the same price. Wouldn't it be great if we could do a search and come up with the real number of "unique" sites offering what we're looking for, rather than all the sites connected to one of the "big boys?"

Response from: Jason (09/24/05 10:31am)

We are really still in the early stages of this of using Web Services. Right now developers are simply writing interfaces for a single "big boy," as you put it. What is starting to happen is that developers are writing inerfaces that combine different Web Services from different "big boys." This mashup will lead to new ways of looking at information and will help people find things easier or look at things in a different way.