How Amazon Opens Up and Cleans Up

By allowing friendly hackers to access its data and feeds, the e-commerce giant is creating a fast-growing ecosystem where buying and selling thrive

When Paul Bausch goes to the bookstore or mall, he brings along his cell phone -- but not to chat with friends about his purchases. Bausch, a programmer and Web developer by trade, has written a simple piece of software that lets him download onto his handset lists of favorite items on If Bausch wants to check out a cooking gadget before he buys it at a store, he can pull up his wish list and make sure he's looking at the right model. He can also check the store price against Amazon's. Or, he says, "I can click through right on Amazon if I want to have it delivered."

Amazon (AMZN ) may not always get the sale, but that's just fine with the e-commerce giant, which is playing a more central role in Bausch's buying habits. Amazon has made it easier for Bausch and other developers to get the info they want. Since April, 2002, Bausch -- or anyone who has signed up as a developer with Amazon's Web-services program -- has been able to download data feeds from Amazon in XML (extensible markup language) format. Plenty of Amazon hackers have, like Bausch, made tools for their personal use or to put them on their own sites. Still others have made a business selling their tools or software based on Amazon's XML feeds to other companies and Web sites.


  The company Jeff Bezos built hopes to attract more folks like Bausch, says Colin Bryar, Amazon's director of Web services. To date, 27,000 developers have signed up. "They're doing innovative things that we would not have gotten to," says Bryar. Most are only part-timers and hobbyists, but a growing number are serious programmers who seek to make a living selling products based on the data Amazon is offering on a silver platter.

Amazon's involvement is limited mostly to observing and issuing free licenses to all comers willing to abide by its rules, and it does have some restrictions. Amazon developers can't use company logos from items sold on the Web site and other restricted material, such as copyrighted reviews. But Bausch, who is the author of Amazon Hacks (O'Reilly & Associates) -- a technical compendium of nifty programs built atop Amazon's free Web-services offerings -- loves the way Amazon has opened itself up to the world. "Web services is a way of acknowledging that people want to use your data, and you don't mind," he says.

And by opening up its servers, Amazon has created a fast-growing ecosystem. This includes software companies such as SellerEngine, in Portland, Ore., which builds a desktop application that uses Amazon's XML feed to allow companies selling on Amazon to compare their prices to those of other Amazon suppliers -- and to price their products accordingly. Other software companies, such as The AssociatesShop, have built free programs that allow Webmasters to easily pour Amazon content and product information into their sites.


  Entrepreneurial Amazon hackers make money by providing software for merchants who sell on Amazon and taking a cut of each sale. Still others have customized hardware. Take scanner company iPilot, which makes a pocket-size barcode scanner that can upload universal product codes (UPCs) onto a computer. With a simple software script, anyone can upload those UPCs into Amazon and get product information on those specific items. Online store builders can compile whole inventories by walking the aisles of, say, Crate & Barrel, checking if the items are available on Amazon, and using the codes to construct their shop offering.

The possibilities don't stop there. Want to know how book-sales rankings are changing at Amazon in real time? Bausch can tell you how to write a simple program that creates a ticker of such info for your Web site.

As Amazon continues to grow online, it's becoming an increasingly valuable source of information not just for sellers and buyers but for anyone tracking -- and doing -- e-commerce. Another hacker built a way to link Amazon's catalog of CDs to the top songs in rotation at major radio stations around the country, says Bryar. And this hacker included a buy button, so the tunes are just a click away on Amazon.


  All of which makes the e-commerce giant an early adopter in the march toward Web services. True, this means an inherent loss of control as customers and partners slice and dice a significant portion of Amazon's data to suit their needs. Yet for Amazon, it also means lots of free help -- and a tighter link with customers. "It's quite likely that in the next three to five years, customers will decide the interface," says Ronald Schmelzer, a senior analyst at ZapThink, a Web-services analysis firm.

Bryar hopes that by setting free much of its internal data, Amazon will transform itself from a retail site and a provider of some hosting and transaction services into the key e-commerce platform. To date, much of Amazon's focus has been on providing content-hosting and order-fulfillment for such big stores as Target (TGT ) and Circuit City (CC ) as well as smaller companies in Amazon's zShops area. In 2002, Bezos & Co. brought in $246 million in revenues providing services, such as Web hosting and Web services. Overall, Amazon grossed $3.93 billion in 2002.

Amazon's wish is that eventually, all shops will have a buy button and that everyone will use the data that Bausch and other Amazon hackers grab and configure. "Amazon's mission for Web services is to become the commerce platform for millions of people to buy anything on the Internet or any Internet-linked device," says Bryar. He won't reveal Amazon's revenues from its push into Web services (which excludes such services as Web hosting). But he says the company is happy with its progress as it strives to create a world in which Amazon is everywhere.

By Alex Salkever, Technology Editor for BusinessWeek Online