This is going to be a short post…
Many social networks are still trying to figure out how to monetize while others are monetizing off of them. People are monetizing Facebook apps, selling Facebook apps and Twitter clients. Maybe this is a dumb question, but why not make it part of your API agreement that any company making a profit from your API needs to give you a cut? The APIs could still be free, and if an app makes money, the API provider gets a piece. After all, isn’t the apps success based largely on the technology provided by the API provider? Just seems like it makes sense to me. I’d love to hear your opinion.
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May 13th, 2008 10:25 pm
I think that’s a genius idea - so simple to implement, and so aligned to the unstated goal of social networking to bring people and organizations closer together. Nothing promotes togetherness quite like shared economic benefit.
May 14th, 2008 5:12 pm
Great point Matt!
May 16th, 2008 6:50 pm
I think the strategy that most providers of free and open APIs have is to let developers use them for a couple years to demonstrate their value and then later, they can start charging for the entire API or just for more useful or higher level parts of of the API. They should let the 3rd party developers get nice and comfortable for a couple years of free use, then flip on the pay switch.
This will force 3rd party developers to think of how they can either monetize or ask their users to pay so the API fee use can be covered. Then we will see fewer silly Facebook apps like Food Fight and Zombies. These apps are great as a proof of concept, a way to demonstrate the platform with something trivial. Facebook has mentioned that they might start charging app providers that use the F8 platform.
For some reason, charging for more features is seen more frequently in direct-to-consumer applications like 37Signal apps. A few platforms (not all necessarily in social networks) I can see getting away with charging 3rd party developers (after scanning the most popular API list at Programmable Web) are Google Maps, Twitter, Feedburner (they used to charge users fo advanced stats). The reason I pick these is because service have reached a critical mass and there is no longer a reason to offer the API for free (unless they want to become even larger).