What benefits does creating an API give to your service?

Question

If I was a webservice, such as Twitter, how does creating an API for people to access my data help me? I can see that they are extending your service to areas that you might not have the resources to expand to (in a way extending your own service), but is it worth all of the bandwidth and infrastructure costs associated with giving access to your data?

All of those little Twitter apps can't be bringing in money for Twitter. I would presume the opposite.

EDIT:

ANSWER 1: Someone with time/money can make your service more popular. You can also place limits on the API usage (as Google does).

ANSWER 2: It is easier to add value to your service than to clone your service. This additional attraction can make/break your site. You can even charge for access.

ANSWER 3: An API is good when it extends an already-working business model. (Don't be Twitter.)

Answer 1

The benefit is clear and you mention it. Someone with time (or money) and a certain inclination can make your product do something you didn't see value in, thus making your product more popular. You can balance the cost/benefit scale by placing limits, like Google does on some of their APIs (1000 requests/day, for example).

This is of course no substitute for having a business plan, which Twitter seems to lack, with or without APIs.

All those Facebook apps for sure are bringing lots of revenue...

Answer 2

Quite apart from alturicity, you dissuade cloning of your service . It is much easier for a third party to add value to your existing infrastructure, than to clone the entire site. This additional attraction to your site, can make or break it.

You can balance the cost and infrastructure of servicing those external data accesses against the benefit derived. It may even be possible to charge for access.

Answer 3

Quite apart from alturicity, you dissuade cloning of your service . It is much easier for a third party to add value to your existing infrastructure, than to clone the entire site. This additional attraction to your site, can make or break it.

You can balance the cost and infrastructure of servicing those external data accesses against the benefit derived. It may even be possible to charge for access

Answer 4

This is a VERY important question for the business to ask early on. There's a sense in web 2.0 that any and all APIs are good. That isn't so.

Because of my job, I've worked intimately with the Twitter team - they get 80%+ of their traffic through their API. And they know that they will most likely never be able to monetize that traffic. The recent $15m injection is much smaller than they would like, but their investors understand that slapping ads on the sites aren't necessarily going to make the business profitable.

Bottom line, for me, is that an API is good when it extends an already-working business model. That also applies to a business model that may not be profitable, but does have revenue streams. (Twitter has zero revenuess streams)

Answer 5

That's one of the most important questions that has to be asked nowadays, and Twitter is a very good example. As some of users have said before, Twitter get 80%+ of their traffic through their API. But I think it's also the reason why so much people is unable to reach Twitter most of the time.

This is an important desicion, as you have to plan everything correctly. The API code quality, server maintenance, project globality etc. have to be planned. It's not a rule to create an API for a website, because everyone is creating APIs. There are some important things that have to be considered;

• Is it really necessary to create an API?
• How much will it cost (code development, server maintenance, help document preperation etc.)?
• Will it effect the usage when the API is limited?

I really would love to thank to Dove for openning such an important discussion.