Google's API Greed is Bad for Innovation

Google is going to start charging for access to its Adwords API, Mediapost reports. An API is like a coat rack that allows developers to build "coats" that add functionality to Google's service through data exchange. If this cascades into other Google services and other companies it would effectively slow innovation.

So many of the great new sites that have popped up in the last year are "mashups" that blend a big player's data with ingenuity from one more more geeks. Take this mashup for Google Maps and Craig's List as one example. If charging for API data becomes more widespread among the big players, it will slow innovation. I am personally excited about creating mashups for marketing purposes. But moves like this could get me thinking twice if the fees become too costly.

Why should we pay for sending a site traffic or data? It only builds the brand of the core technology.

Technorati Tags: Google, Mashups, API

Comments

[Jarid]

I agree that fees might slow down innovation, but I don't think greed is the driving factor. The fees are necessary in order to protect Google's systems and/or to encourage efficient use of API calls.

eBay charged for their API usage for several years (until November), and they still managed to build up quite an ecosystem around it, so all hope is not lost...

[David Tebbutt]

If the mashup results in some kind of promotion for the the service provider played a part, then you're right.

But what if their information is used but their role hidden from view? I would imagine that this is what they are getting nervous about. And with good reason.

It's leeching.

Thanks Steve for highlighting this move by Google. Hopefully more media attention will get Google to listen and respond.

[Daniel Bernstein]

This raises the issue of what's worth paying for on the web in general. The example I always use is of Audiogalaxy, back in 2001.

Wikipedia: "Founded by Michael Merhej and sporting a web-based search engine, always-on searching for requested files, auto-resume and low system impact, it quickly gained ground among file sharers abandoning Napster in 2001."

Avid users will remember that the site was free, then ran into legal problems, began to charge a small fee for the service, but was eventually shut down. Anyways, I loved Audiogalaxy ... not only was I downloading any song I wanted, but the site was also introducing me to new bands. Despite how much I dig iTunes, they still haven't been able to bridge my musical interests to new bands as well as Audiogalaxy did.

Here's my point. When Audiogalaxy decided to start charging for their service, I didn't hesitate. Despite being on a student's budget, shelling out the dough was a no-brainer, the site was providing me with a service that I could never accomplish on my own.

Steve, what if Digg expanded its services to mashups and slowly developed a payment model to reflect users' interest in the mashup. For example, until your mashup reaches a certain interest level, it's free, and as it becomes more useful, it becomes more expensive. When it becomes too expensive, it'll naturally become less popular. I think it's called supply and demand.

Companies can't just go and charge for any mashup, but they should be able to charge for the good ones. Similar to Audiogalaxy, paying a small fee for these would be a no-brainer.

[Usher Lieberman]

Because Google, et al, sees the mashups as their IP you are making money off.

What I think they should do is allow free access to the APIs for non-commercial purposes, but if you're in a commercial enterprise and want to use their APIs, absolutely they have the right to charge for it.

I do agree it will slow innovation, but hey, Google wants to know first how the innovation is going to help them. If its worth something to you it is worth paying for. Not everything is free (and really at Google *nothing* is free, it just hasn't cost you any money up until now.)

[Ed Kohler]

I haven't been following this, but that won't stop me from commenting. :-)

My guess is Google is trying to figure out how to regulate how often advertisers check and update their bids in the AdWords platform. If it's free, they can regulate it based on a number of edits/day or other time period. But if it's paid, they can let people edit to their heart's desire. While at a high level charging may seem ridiculous, it's not necessarily a bad way to regulate behavior on their system, and likely won't dent the pocketbook of non-maniacal AdWords users.

[DavidZHawk]

The real issue here is not that Google is charging for API access but rather that Google is creating monopolistic barriers to how third part bid management tool providers use their API. If you read the new Google T's and C's you will see what I mean. This will fundamentally change the way commercial developers use the AdWords API. I wrote a (really long) blog post on this here: http://blogation.blogspot.com/2006/04/changes-to-google-adwords-api-why-its.html

[Simon McDermott]

Frankly, it is a good thing when Google and other search companies charge for API. This allows companies who have genuine commercially attractive models that require Google information to pay for it and to have some Quality of Service. Presently for the vanilla API there is a limit of 1000 searches and no commercial possibilities, I would welcome this becoming a paid for service (like Alexa). Google has no obligation to offer free API access to anyone, the actual monopolistic behaviour is not allowing commercial use of the API, the charging for it is just how they cover costs and make money on a service people want to use... Simon McDermott, Attentio

[Bard]

Hi

I think the problem is that having been with Google for two years as an ad words customer it is very clear to see that the auction system for biding on keywords that was introduced (Dec 05) has resulted in excessive cost increases - some by as much as 500%.

How any business model can cope with these increases in such a short space of time is beyond me - the end result is a worse deal for search users as costs are passed on. They even had the arrogance to sugggest that I should improve a once successful web site to help conversions!

What goes up (new stock price high today $500) always comes down. I hope it is sooner rather than later so they can do us all a favour a disappear from where ever they came from. A new European search engine is being developed and it can't come soon enough.