APIs are now a Billion Dollar Business. Expedia’s Affiliate Network earned $2B/year using APIs.

Businesses are already making millions of dollars in additional revenues by building APIs and leveraging various API distribution strategies. In this post, we are going to explain how businesses can benefit by building APIs and increase their profits by using various distribution strategies.

If you are a business that has one or more products that you generate revenue from, you should consider exposing these products to the outside world (consumers) by building Web APIs.

APIs (Application Programmer Interfaces) are conduits by which sophisticated internal business processes are exposed to the outside world by simple web URLs. This allows third party users to purchase these products from your businesses using channels that would otherwise be unavailable.

For example, say you are a door company that sells custom doors using a website. If you were to create an API that would allow authorized users to order doors or obtain quotes using this API, you have now exposed a significantly sophisticated business function to the world via a series of simple web endpoints.

As another example, say you are a ticketing company that sells Event tickets. If you build an API to allow people to purchase tickets, you’ve now suddenly opened up some interesting possibilities in revenue generation.

With APIs, you suddenly gain distribution strategies and channels you never imagined before

Imagine the ticketing company from our above example. Now that they have an API, they can leverage it to do the following:

1. Build a Mobile App and allow customers to purchase products (in this case, tickets) using an app.
2. Integrate with 3rd Party Applications – Multiply revenue streams by integrating your product with other products and give it more visibility. This is the largest contributor to the rise in revenue. Slack is a great example in how it allows others to build apps using its platform apis.
3. Integrate with 3rd party systems for e.g. POS systems or Kiosk systems to allow sales at stadiums, theaters etc. In case of the ticketing company, this alliance would not only benefit the ticketing company, but also benefit the POS systems company which could now offer a ticket purchasing app out of the box thereby convincing stadiums and other venues to potentially buy their POS systems over someone else’s.
4. Build an Affiliate Network by powering other companies to consume APIs and build their own systems. Expedia’s Affiliate Network is probably the largest and the most successful example of an affiliate network.
5. Organize Hackathons – This will allow other developers to mash up your API with other products and identify more revenue streams. Hackathons are a way of crowd-sourcing your business’ revenue generation capabilities. Commonly used by companies in Silicon Valley, hackathons are a great way to find cheerleaders for your business.

So how do you market your API?

If you’ve already built your API, look no further. Here is a listing of some great marketplaces to distribute your APIs:

1. Mashape – Mashape is the largest API marketplace and allows you to easily host private and public APIs on their platform. With over 170,000 developers on their network, and a bunch of open source tools like Kong, businesses can easily list their APIs for consumption. It even allows you to create flexible pricing plans for your API users using simple wizard based tools. It performs invoicing on your behalf too.
2. Mashery – Mashery is yet another platform to allow you to build a management layer around your APIs. It doesn’t have a market place, but still has the right tools to secure your APIs.
3. 3Scale – Provides a comprehensive suite of products to protect and monetize your APIs.
4. Layer7 – Acquired by CA, Layer7 also provides a great set of tools to manage and monetize your APIs.

On our blog only, here are some amazing videos, slideshows that we have compiled just for you:

1. Tom Tom – http://www.mashery.com/blog/empower-your-business-and-monetize-your-data-apis
2. An insightful presentation on API Business Models
3. Kong – An open source platform for managing and securing an API.
4. A great slideshare on how APIs are reshaping your business.

So there you go, this should give you an idea on how to establish some great distribution strategies for your APIs

If you’re a business looking to grow your revenues by building APIs, feel free to reach out to us at hello@hypertrends.com