An Open API is the New Black
by Michael HoffmanFriday, June 29th, 2007
The big news in social networking and tech is the new open platform of Facebook. Facebook is a hot social networking site and the open platform means that I can build an application and have members of Facebook spread this to all of their online friends. Project Agape, a company that built the first causes application for Facebook, has surpassed 1 million users to their application and raised over $100,000 — in about 1 month. Their application is called Causes, and when you sign up you can pick from many causes, such as Save Darfur or One.org. An icon of the cause shows up on your profile page and your friends get notified about it and anyone on your page can then click to donate or learn more.
There are problems with this Facebook thing, the biggest of which is that the application you build has to run on your own servers, which means only those with the resources to serve data to millions need apply. (If you are interested in these issues read Marc Andreessen.) But I digress.
This is only the beginning and I will write more about where this is going and all of the other players working on bringing nonprofit causes to Facebook.
Most commentators say Facebook’s move to open up is a game changer. MySpace, the biggest of the social networks, has allowed widgets for a long time. Widgets are embedded mini-applications, such as a video player or slide show of my photos from Flickr. But a widget doesn’t harness the native functions of the network in the way Facebook’s platform does. And MySpace has limited what you can put in a widget, not allowing you to have advertising for example. Facebook has not such restriction — meaning they are allowing the companies that will develop application to monetize those application — which will obviously attract more developers.
So today I heard that MySpace is working on opening up as well. The business idea here is that a platform is more valuable than an application. People will use an application. But if many people build many interesting applications on your platform, they make the platform indispensable. It’s kind of like Windows (used to be?) — the platform (Windows) supported and made necessary by all of the applications (Word and Excel and games, etc.) built on top of it.
The open platform idea is not limited to the social networking folks. A pioneer of this has been Salesforce.com. Salesforce is an online application to manage your contacts and sales information. They realized a while ago that they had a very strong database application and invested a lot in infrastructure. So they allow others to use this base and build on top. So, for example, companies have built applications for the tracking of donations on top of Salesforce.com. There is even an application to track blood donations. The buyer of any third-party application must also subscribe to Salesforce.com. For the company producing the application, they don’t have to worry about anything other than the presentation layer, they can hook into Salesforce for the rest.
Amazon has gotten into the act as well. Of course they have big servers and know how to manage data. So they said, in addition to selling books and music and everything else, why not let people use our infrastructure. For example, want to put your products in our warehouse and utilize our mailing and software to pick and ship? Why not? Among other things, they launched a service called S3, which means Simple Storage Service. They are saying… you build a web-based application and you need to store something — data, photos, video, whatever. And you can keep adding servers and paying lots of money, but we already have this, so why not use our servers and pay-as-you-go a small fee per gig.
There is word that Blackbaud (Nasdaq: BLKB), the largest company in the fundraising software space, is moving toward opening up their systems. And I saw something about Kintera (Nasdaq: KNTA), a company that is bleeding cash, thinking of opening up as a way to attract developers who will make the product more useful. I just read that LinkedIn, the business networking site is working to open up as well. I think we should expect this trend to continue.
It seems opening up and that open API is indeed the new black.
