Continuing on the theme of Metia folk blogging about APIs, here's my take:

Building an application that uses data without an API might well be likened to building a house without a door. Such instructions provide a platform for accessing web tools and a means for exchanging information.  It is typically ‘given’ that APIs are published for mutual benefit.

The question then surrounds whether access should be charged for or whether content should be shared between communities cost free. Recently API monetization has been a hot discussion topic, below we consider these options facing communities today.

Amazon released its free API to create an open architecture and platform for their product information and e-commerce functionality. It allowed developers, web site publishers and others to leverage the features that Amazon uses to power its own business, and then potentially make money as an Amazon affiliate. For Amazon, not charging for its API access had a clear advantage here of creating a significant online presence in addition to improving brand image. At the same time it might be feasible to suggest that by giving developers a playground to leverage ideas brings additional innovation through an on-going stream of new concepts.

Similarly to Amazon, the Google AdWords API program historically allowed developers to use applications that interact directly with its server free of charge. However things have changed and today $0.25 per 1000 API units consumed is charged. By incorporating this fee, Google benefit from an increased revenue stream as they have already covered the costs of running the associated API infrastructure, management, maintenance, support, communication and promotion. Such strategy caused an increasing backlash from developers who accused Google of greed; yet in their defense, incorporating a fee surrounded attempts to increase efficiency and restrict resources. The rationale behind this argument considers the fact that the more API used the more one will pay, enabling all parties, big or small the opportunity to use as little or as much API as required. This in turn ensures the availability of Google’s AdWords API platform.

If it is decided upon to go free and open, the business metrics must be identified in addition to how it will fit into the business model and objectives. If monetization is a main goal it is important to note not only how the charges might be implemented or benefited from, but also how the community will view the charge. Offering a free service, then charging for it later, might have a negative community backlash- as witnessed by Google Adwords- despite its likely responsible intentions.