Affiliation as the mashup business model
Update 3/31: Peter has a post which very nicely correlates with this. I suggest checking it out.
When you use someone else’s API you become a reseller. That is to say you provide distribution to their service. Most web services don’t have business models for their APIs because they don’t have reseller business models, yet.
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This is just a very humble opinion, but I think the only serious way to make business out of mashups1 is for the mashed-up service(s) to provide affiliation features and give the ‘mashuppers’ a slice of the generated revenue. A mashupper — ie. ‘mashup provider’ — functions as a retailer for the service backend and thus earns a provision for the business created for the actual service provider. Although this affiliation aspect covers only a little part of the whole Internet servicing service mediation ecosystem issue, I really believe it’s the most crucial. Yes, all the traditional stakeholders — like marketing and customer/developer support — 
are possible, but those are supplementary roles and not directly linked to business transactions. The beef is in the actual business service. (I guess this is obvious? Why the heck am I writing this post?)
For example, the Google’s search isn’t a business service (fortunately!), thus there would be little sense to provide a SOAP api for it.2 Unlikewise Amazon’s api, which produces hard cash for Amazon and so it’s feasible to provide affiliation3 for it; the same goes for eBay. And I wish there’ll be a lot more in the near future!
WS-Affiliation anyone? We don’t want a zillion proprietary affiliation mechanisms! (Naturally, the possible exception to the ‘we’ are the restafarians. God damn those short-sighted hippies!)
Tags: internet business, web service
1) This (very short) post doesn’t concern SaaS or any other software business. This is about all kinds of consumer business services that are delivered—at least partially—through the internets.
2) Oh, lookie here: there’s still a SOAP api for AdSense. (Which was expected, of course.)
3) This is related to the Amazon E-Commerce Service.
Interesting. Thanks for talking about this…’mashup’ business model.
So you don’t think marketing is one of the the most crucial roles in a business?
I have a different philosophy but I can understand why you think about it this way.
Warmest Regards,
Rasheed
Rasheed
January 19, 2007 at 6:13 am
Lol… good sense of humor but some great points aswell!
Search Engine Marketing
January 19, 2007 at 7:08 am
Hi guys!
Rasheed, yes I do too regard the marketing as one of the most important roles here—as in traditional business as well—but I still think tapping the actual business flow is the most fundamental feature in mashup business; which I guess is the case with any other business as well.
For the moment, affiliation is probably mostly used (along with ads) in a pretty simple, html–snippet -kind of way to monetize all kinds of websites, including blogs—oh, wait, I think that’s just affiliate marketing and thus pretty irrelevant for the issue at hand… But, more advanced large scale integration probably isn’t that far away any more and then we need to incorporate affiliation for the apis that provide programmatic access to services; ie. what the Amazon and eBay have been doing for some time already.
Thanks for the comments! (That Akismet sure is eager… it’s to be blamed for the minor delay.)
Janne Savukoski
January 19, 2007 at 6:25 pm
The internet marketing model….is mainly affiliate marketing using PPC. To say it is competitive is a real understatement
Eddie Wolfe
March 5, 2007 at 9:01 pm