Are there any good monetization strategies for webservice/API providers?


2

I often have ideas for a webservice ... as in a live internet programming API (Application Programmable Interface) for other websites. Ideally, I'd like to allow access to the API for free in order to gain more websites using it.

But how can I possibly monetize this? How can I even cover my costs? ... any ideas?

EDIT: Thanks for answers so far, but sorry I should have been more clear.

A few API monetization strategies that I can think of:

  1. Develop a highly specialized API which does some calculation which most people wouldn't even know how to program.
  2. Develop an API which somehow captures information, which can be aggregated and sold.
  3. Develop an API to add value to another existing monetizable product.

But what I'm asking about mostly is; How can I turn 'commodity like' functionality into an API, which I could make money from.

For example; how could myopenid.com OR gravatar.com monetize? I don't expect websites are paying for these services.

Monetization API Web Services

asked Nov 25 '09 at 09:03
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John Mac Intyre
1,086 points
  • If you mean "commodity" as in "fungible and already exists for free," it will be hard. If you mean "anyone could use it," then it sounds useful to try and there's any number of ways to monetize. – Jason 10 years ago
  • It's more of a "doesn't exist yet, but could easily be duplicated". – John Mac Intyre 10 years ago

3 Answers


4

It really depends on the ideas and the value to others, not on the fact that it's a web API.

There are places you can post new web APIs for exposure, but of course that's not money.

Requiring an account (with security token) makes it possible to track use for later monetization, so that part is not hard (or at least, you just have to do it once).

The real question is: What service is worth paying for? How can you charge? Amazon uses a micro-payment model -- people seem to like that (and you could use Amazon payments to run that model as well). Or free until a limit of API calls/day or /month or bandwidth or whatever makes sense for the service. That way it's free to try but if it's in real use I start paying.

There's tons of services out there of all types! So in general it's a sound business model.

answered Nov 25 '09 at 09:43
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Jason
16,231 points
  • I understand what you're saying, and perhaps the prudent path would be to only program things people will pay for, but the internet is full of free stuff, and I'm thinking there's got to be a way. Thanks for the answer. +1 – John Mac Intyre 10 years ago
  • +1 for API is a product... what service is worth paying for? Charging is the mechanics part of the equation. What value can you provide? A good post from tom preston on [gravatar](http://tom.preston-werner.com/2008/10/27/looking-back-on-selling-gravatar-to-automattic.html) maybe interesting here. He "monetized" by selling gravatar outright. – Jim Galley 7 years ago

2

You could offer a free plan that had a cap of X calls per day. At the same time, offer a paid version that gives them X*10 calls per day up to a certain amount then like $0.10 per call after that. Also, you could consider requiring the free users to place a logo like "powered by YourAPI.com" somewhere on their website in order to gain market traction.

If you API has any real value, the free users would eventually up-convert to the paid model. Your target is obviously website operators, not kiddies and tweens on MySpace. I doubt you should have a problem monetizing your service from these users.

answered Nov 25 '09 at 18:24
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Joe A
1,196 points
  • While I agree, many website operators would pay for many services, I wonder how commodity like functionality would fare? thx +1 – John Mac Intyre 10 years ago

0

You might want to take a look at http://mashery.com/. They have some white papers and I believe they offer free consulting.

Having an API strategy is only part of
the puzzle. Contact Mashery today for
an assessment of your business
strategy.


Mashery is the leading provider of API
management services enabling companies
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distribution channel.

answered Dec 1 '09 at 08:57
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Olivier Lalonde
2,753 points

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