eBay Could Drop Developer Fees

    November 14, 2005
    WebProNews Staff

Fees charged to third-party developers may be ending today, as eBay seeks to remove that barrier to entry for those who want to build software upon eBay’s APIs.

The rising threat of Google may have pushed eBay into this move, as announced by the New York Times earlier today. With the search engine company widely expected to enter the online classifieds field, eBay probably sees that as a competitive move they need to counter.

Greg Isaacs, director of the eBay developers program, told the Times: “We hope to encourage new ideas and accelerate the growth of our developer and affiliate communities.”

That community consists of about 21,000 developers. When they develop applications, or simply affiliate with eBay, their work sends business to the auction site.

Compared to the rest of eBay’s revenue, developer fees don’t figure greatly into the stream. Isaacs said in the story those fees range from a few hundred to tens of thousands of dollars, and mentioned a couple of big API users, Verizon and EarthLink, as examples.

Though the fees would disappear, eBay will still charge for access to its database of transaction histories by third-party applications. “The knock on a lot of Web 2.0 is, ‘Where is the revenue model?’ ” Isaacs said. “We think we have that figured out.”

Knocking could be the sound eBay hears at its doors. Along with Google, which had its patent application, complete with classifieds.google.com URL announced last week, Yahoo has been working on tweaking its merchant offerings. Both companies make a variety of APIs freely available to developers.

UPDATE: Greg Isaacs from eBay was kind enough to send along an important clarification about the change: “It is important to note their license agreements usually prohibit the commercialization of developer applications. So essentially they are for personal use and cannot be sold. eBay’s belief is to give developers a commercial opportunity (which we’ve offered for quite some time) if they choose to pursue it.”

David Utter is a staff writer for WebProNews covering technology and business. Email him here.