Following a path laid by open source developers, eBay may open up some of its source code in order to quicken the pace of application development and open up new business opportunities.
The company is "currently investigating" the possibility of giving way the source code for its software development kit (SDK), under some form of open-source licensing plan, said Matt Ackley, senior director at eBay's developer program.
"It's one way to deal with our pace-of-change problems," Ackley said after a keynote speech at the Web Services Edge show this week.
In general, efforts by large e-commerce companies to encourage research and development by third-party developers has fostered innovation.
Developers, attracted by the chance of getting a share of the big e-commerce companies' business, are creating new ways to drive site traffic.
According to eBay, external programmers and entrepreneurs have created more than a thousand applications using the company's SDK and application program interface (API).
EBay claims that 42 percent of the items on its Web site come in through external applications.
"Our biggest challenge is how to let the third-party developers adapt to the rapid changes of our platform," Ackley said. "We don't have the resources to offer SDKs in all languages and update the information as often as we would like. Today, we provide this forum for the developers to contribute their code," Ackley added, referring to SDKs. "What if we actually also contributed our code?"
The idea is welcomed by software developer Alex Poon. Poon makes a living from successfully implementing his idea to allow mobile phone access to online auctions through eBay's API.
"From a developer point of view I love open source," Poon said, pointing out that, however, his own company has passed the stage where an open-source SDK would serve its purpose. Since last summer, anyone with a Java-enabled mobile phone in the U.S. can search and bid on eBay items using the Pocket Auction application developed by Poon and his colleague Richard Chen.
"I did my Ph.D on medical informatics and have been working with wireless, pen-based devices. The concept is still the same with mobile phones and we decided to do something other than game applications," Poon said.
Today, Bonfire Media -- comprising Poon, Chen and a third employee -- is selling its product via mobile carriers to customers across the U.S. Pocket Auction not only feeds online auctions with more potential bidders: eBay also receives a fee from Bonfire for use of the API.
EBay's Ackley defends the charge, which ranges from a flat fee of US$100 up to US$5,000, depending on how many calls to the auction database that the applications does per day, plus a negotiated fee.
"We think it promotes efficiency. It's kind of like a toll," he said.
Poon seems pleased with the business model. "Well, they allow other people to make money. I think it's fair."
EBay's willingness to work with the developer community and find new ways of making money appears to be shared by other e-commerce sites.
Both Google Inc. and Amazon.com Inc. offer Web service programs and hand out free developer kits.
This doesn't mean, however, that the online giants are ready to give away their wares and databases for free. Alan Taylor, a programmer in Boston, is experiencing Amazon's efforts to balance between embracing the flourishing programmer community and guarding its own business.
Taylor runs the Amazon Light site, utilizing Amazon's free API to bridge search queries to other sites. His site allows a user to locate a book, or any product, in Amazon's database and simultaneously check if the book is available at the nearest library, create a blog entry about the item or buy it.
Until last week, if the item was a DVD, you could also click and see whether it was for rent at Netflix. Or if it was a CD, one click allowed users to check if the title was available at Apple Computer's iTunes music store. The features appeared to be lapped up by users but a step outside of Amazon's rules.
"I got a letter from their Web services team asking me to remove the links to Netflix and iTunes," Taylor said.
"It didn't match up with the license agreement," Jeff Barr, Web services "evangelist" at Amazon.com, said. "The expectation is that traffic comes back when we give away data."
Taylor, who is receiving 7 percent to 8 percent of the value of each Amazon purchase through his application, removed the links. "From a useful standpoint, I think it's kind of a shame."
Taylor also says that this type of reaction obstructs creativity among third-party developers. "It's a little bit of a chill: 'Oh, I don't want to deal with these giants' legal departments.' As soon as a company put up a single entry barrier they need something really worth while in order to get people playing with it."
However, Taylor welcomes eBay's examination of an open-source model for at least some of its software.
"It's great if you are talking about true open source, the more open the better," Taylor said.