Interview with Greg Isaacs (eBay - Director Developers Program)

Another repost from the 1000 Flowers Bloom blog that I thought was appropriate since it talks about APIs:

I met with Greg Isaacs last week to talk about the eBay Developers Program and I have to say that it was the first time that I have ever had an embargo put on something that I could blog about.

The big announcement is that eBay has made their APIs free. Obviously they're hoping to get more developers to use their web services. Techdirt and others are covering the story.

What's maybe not so obvious is that they were one of the best examples of someone who was actually making money from their APIs. It's almost a shame that could make more money by becoming free. I always viewed eBay as one of the shining examples of companies that made real dollars from their web services. Greg dashed my world view when I talked to him though.

One other really interesting thing to note is that eBay has been in the "Web 2.0" game of releasing their APIs for the last 5 years. The amount of listings volume and revenue is pretty staggering when you see the stats.

Question to ponder - Do you need to have an existing business model before you open up your APIs? The eBay example seems to point to yes.

Read on for highlights. Listen to the conversation here.

Why remove the fees?

Greg - "Historically eBay charged for their APIs, eBay is announcing is that it will be removing all API fees for call volume and annual fees. We are planning on building on current momentum. By making the APIs free allow developers to continue to build really wonderful innovative applications."

Greg - "We never charged for the APIs for direct revenue, it was always about efficiency. When we got started making our APIs broadly available 5 years ago it was not a foregone conclusion about what value our developers would drive and what it meant for our infrastructure."

Greg - "We want to do two things by making the APIs free – number one to all of our developers who have been with us for a number of years say thank you and the second is around new developers, our motto is innovation without barriers. We want to remove as many barriers as possible. Let’s get rid of them and let developers do what they do best."

It's interesting that the API calls were originally all about efficiency to make sure that people were not abusing the system.  I really thought that they might have a whole separate business around providing the webservices. Obviously the API revenue was smaller than the overall revenue that they could get by getting more listings onto their site.

How much in terms of revenue is coming through 3rd party developers?

Greg - "Today about 22% of eBay.coms listings come from 3^rd party developers and that is up from 20% in Q2”

Wow. That's a huge number. Think of how many listings there are on eBay and what 22% of those listings represents. One question I'll be curious about is how much that number grows once the APIs are free.

What does eBay do for developers?

Greg - "To make developers successful we have done a bunch of things. We give them a lot of marketing support - for example, a solutions directory solutions.ebay.com an online directory where eBay buyers and sellers can find tools, we also give them lots of technical support, online as well as live help. We also have a sandbox which is a replicated version of the eBay production environment which is available for eBay developers to test it before going live to site."

You can tell that eBay has a pretty mature program. They do a lot of useful things for their developers that others are moving to catch up and do.

What are some interesting things that others are doing with eBay's API and data?

Greg - "Terapeak takes eBay’s unstructured data and puts it in a structured format. If you want to sell iPod Nano’s, you can go to Terapeak’s system and get a wealth of information of historical transactions around average selling prices, conversion rates on iPod Nanos, look at what time of day to sell, what features like Bold to use."

Greg - "Mpire built a selling tool for eBay sellers, it allows you as a seller to manage your eBay inventory and get a snapshot of how you’re doing financially and allow you to manage your contacts."

I think that there is probably a tremendous amount of value locked inside of the transaction data that eBay has. Very cool stuff that Terapeak is doing. Mpire sounds like CRM/ERP meets eBay. It's amazing to me that there is this whole eBay economy that can use this.

Will there ever be a time when people don't go to eBay the website at all?

Greg - "A lot of our sellers today don’t even have to come to eBay to manage their business and we designed that intentionally. On the buy side today we have a whole host of applications that allow you to sell more efficiently whether you’re on the browser, telephone etc."

Greg - "Something I’m very excited to see is when you can search for an item and you can list an item on eBay without ever having to go to the website. My belief is that will increase the size of the marketplace and that’s a win win for everyone."

This is pretty amazing and even if they don't call it Web 2.0 at eBay they clearly get it. eBay could end up being an underlying commerce infrastructure layer for the whole web. What an amazingly powerful position to be in!

What is eBay's take on Web 2.0?

Greg - "For us it’s been less about buzz or hype and more about economic opportunity. We’ve always focused around how can we make developers successful and how can they actually make money. That doesn’t always go hand in hand with the latest fad or the latest buzz."

eBay does a terrific job of marrying a business model to the Web 2.0 concepts. In fact I think it's fair to say that they're a real pioneer at doing that.

Can I show both eBay and Amazon content on the same page?

Greg - "In our license agreement that is allowed and the one caveat is that with the listings from Amazon and eBay must be visually separate. The last thing you want is someone to click on an item thinking they’re going to eBay and go to some other site. Go to Fatlens and you will see concert tickets there not only on eBay but also on various other marketplaces that Fatlens does business with."

Again I'm amazed at the willingness that people are showing in putting their content and functionality up next to a competitors. I think that many companies have really gotten themselves out of the walled garden mentality now.

What should the others like Google and Yahoo do with their developers programs?

Greg - "I’m not going to give you all the information you like about what they should be doing because after all we’re going after the same developer mindshare."

This further reinforces to me that there is a real war on now for folks to get a hold of developers and get them creating things on platforms and getting them hooked there.

What’s coming up next for the eBay Developer’s Program?

Greg - "eBay developer challenge with two main components:

• An individual developer prize: $5000 + ability to present their application at the O’Reilly ETECH conference + flight and hotel.

• An open source prize: Xboxes for the winners + ability to present their application at the O’Reilly ETECH conference + flight and hotel."
  

Timeline
0:22 How did you make the jump from Investment Banking to eBay and the Developers Program
1:19 It seems like the Developers Program is a far stretch from Investment Banking.
2:21 What does it mean to be the Director of the Developers Program?
3:49 How do you measure the success of your program
5:08 eBay announces no more fees for APIs
6:10 What’s driving the reason to drop the API fees
7:42 Tell me about how eBay allows people to use anonymized data
8:57 What are your favorite three applications
11:11 What do you wish people would build?
12:48 Do you ever forsee a world where users don’t have to go to eBay directly to buy or sell at all?
14:25 What’s about developers who might be worried about eBay saying hey that’s a good idea I’m going to go do that?
15:57 So you think it will be less of a Google/Yahoo model where you buy up companies?
16:45 Why doesn’t eBay get more buzz around Web 2.0 since it was a pioneer?
18:01 Are you comfortable with eBay data mixing with Amazon data or functionality?
19:12 Fatlens example.
19:56 What do you think about Google or Yahoo showing eBay items in search results?
20:59 What are Google and Yahoo doing right or wrong with their developer programs?
21:45 What else is coming down the pipe for eBay’s developers program?