Platforms, Mashups, and Markets

    December 1, 2005

Yesterday Greg Linden asked Is Web 2.0 nothing more than mashups? In that post, he makes the following claim …

Companies offer web services to get free ideas, exploit free R&D, and discover promising talent. That’s why the APIs are crippled with restrictions like no more than N hits a day, no commercial use, and no uptime or quality guarantees. They offer the APIs so people can build clever toys, the best of which the company will grab — thank you very much — and develop further on their own.

I believe that a lot of folks are wondering about that too. They’re more than a little suspicious of companies like Google and Yahoo! opening up APIs. (Amazon and eBay can’t hide their profit motives, so nobody even wonders about that.)

Related to that, Fred Wilson asks When Is A Market Really A Market? He’s focused specifically on on-line advertising, but his questions apply equally well to lots of other on-line “markets” as well.

So, I believe that right now, we have a marketplace, but it’s a nascent marketplace. The thing that gets me so excited, though, is that is so clear where all of this is headed.

I claim that these two discussions are actually related by the notion of a platform.

The platform is what you must build today in order to create a new on-line market. To be clear, the process goes something like this:

1. Build new “open” platform
2. Get critical mass (this is where mashups start to come in)
3. Add financial incentives, creating a marketplace
4. Profit!

That leads me to ask the only unasked question so far. In the Internet of 2006, what’s it mean to be (or create) a “platform”? What is a platform? Is one necessary to create a new marketplace online?

What do you think, based on the evidence we’ve seen so far?

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Jeremy Zawodny is the author of the popular Jeremy Zawodny’s blog. Jeremy is part of the Yahoo search team and frequently posts in the Yahoo! Search blog as well.

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