Today Yahoo! announced that they would no longer be offering their free Shopping API, which could be used to display product search results for items available on Yahoo! Shopping. The reason? Yahoo! has "decided to enter into a strategic partnership with PriceGrabber to power the Product Submit functionality of Yahoo! Shopping." Umm, ok, but then Yahoo! goes on to say that PriceGrabber does not "offer a free web services API." Zing!
In theory, APIs sound great. You can hit the ground running without having to build all your functionality from scratch, leveraging code written by skilled programmers from another firm as well as the large user base that firm has managed to acquire. It's also smart business sense, as APIs attract developers, and developers are often early tech adopters who like to gab to their friends on Twitter and Facebook about the hip new websites they've been frequenting.
On the other hand if you build a business around an API, you are at the complete mercy of the company behind it. You could be fucked for any number of reasons: they decide to change their terms of service, they throttle usage, they geo-retard it, they decide to start charging to use the service, or they simply close up shop as Yahoo! did.
Lots of little companies like TweetDeck have been quite "successful" building their business standing on the APIs of giants (I put "successful" in quotes because it's not clear to me how TweetDeck makes any money.) But it's a huge business risk to be betting your entire business model on someone else's code.
Better to build your own thing from scratch, and integrate with other services as icing on the cake rather than the delicious chocolate filling.
Related articles by Zemanta
- Yahoo Keeps Turning Off The Lights. Shopping API Goes Dark. (techcrunch.com)
- A cautionary tale on Yahoo!'s potential API legacies (benmetcalfe.com)