Early Days Of a Data-Sharing Revolution

By Leslie Walker

A new version of Intuit Inc.'s ItsDeductible software, which hit retail stores last week, uses eBay's auction prices to estimate the value of charitable donations for tax write-offs.

Later this month, the maker of Grokker search software plans to release a Google plug-in granting access to Google's Web index through Grokker, so people can see search results as colorful, graphical maps rather than plain text.

And next week, a Chicago company plans to start selling a $36 mini-scanner called iPilot that shoppers can use to scan bar codes on products in stores, then upload the data to a computer and compare prices at Amazon.com.

All are examples of how Web sites, relying on a new generation of Internet software, are licensing their databases to business partners and outside developers in an attempt to spark innovation and reach more customers.

"In the past six to nine months, we have started ramping up the program to license eBay's data," eBay Vice President Randy Ching said.

Ching said eBay is talking to many other companies about creating special pricing guides, including a variety of print products. Recently, PGA.com and golf retailer 3Balls.com licensed eBay's historical prices for used golf equipment to give retailers and golfers a reference for setting the value of older gear. Also under consideration are ways to tap eBay's auction prices to help appraisers value insured items when they're lost or stolen.

"The potential is limitless," Ching said.

It's been more than a year since eBay, Amazon.com and Google first opened portions of their private Web databases to outside developers as part of the "Web services" movement. Web services is a vague phrase created by the software industry to describe Internet software designed to help companies and people do business online.

Most of this software remains in early stages of development, but the Web's top sites are starting to experiment with how data sharing might create new business models. Software executives regard this stage as similar to the early days of electricity, when people tried to figure out how power might prove useful in homes and offices, starting with simple light bulbs and evolving to washing machines, ovens and toasters.

So far, Amazon.com says, 40,000 developers have used its Web services program to create special tools. Since Amazon pays commissions to Web sites that refer buyers to Amazon, it doesn't charge for access to its Web services tools.

Google also does not charge developers for access to its search, at least not yet. Google's Web services remain in the "beta" stage of experimentation, and developers are not allowed to run more than 1,000 queries a day against the company's Web index. Yet already, Google says more than 1,000 software applications have cropped up. One is GoogleDuel, a piece of software that lets you compare which of two phrases appears more frequently on the Web pages that Google indexes.

Software developer Paul Bausch considers such Web services programs to be a key part of the Internet's evolution.

"There is a new set of standards and layers emerging, on top of existing Internet standards, that people can use to exchange data," said Bausch, who recently wrote a book called "Amazon Hacks" that explains many of the new tools. "Web services are encouraging private people to create their own features with data sets from these big companies. It allows applications to adapt to users, rather than making users adapt to the applications."

One Amazon "hack" that Bausch mentions in his book lets people access their personal Amazon "wish lists" from cell phones, something Amazon doesn't provide. After all, why would Amazon help you see your saved list of DVDs you want while you're standing in the middle of a Best Buy?

EBay's data-licensing program is perhaps the most interesting, because it involves massive volumes of pricing data in 35,000 product categories. More than 230,000 million items were listed for sale on eBay in the most recent quarter alone.

For now, eBay is selling access to historical sales data outside of the Web services software standards, as simple text transfers. Companies purchase the data at prices starting at $10,000 a year; then they develop their own tools to lump together similar items that sold, or to calculate average selling prices for specific goods. You can't do such analyses on eBay's own site today, though Ching said the company is exploring ways to offer more pricing data in the future.

Separately, the company offers both free and paid access to its Web services, to help developers create tools for simplifying buying and selling on eBay.

One of the first firms to buy access to both kinds of eBay's tools was software maker Andale Inc., which uses eBay's data in a research service it started selling over the summer for $2.95 a month. Andale Research lets people compare pricing trends on specific items, such as a 10-gigabyte Apple iPod music player or the Viewsonic P810, a 21-inch CRT computer monitor. Typing the Viewsonic model number into Andale's research box tells you that its average selling price has dropped in half since January, to $100, while the number of units offered each month has fallen from 549 to 52. At the same time, the value of 10-gigabyte iPods has held relatively stable on eBay, averaging $237.

Tens of thousands of people are paying Andale to use the new research service, said chief executive Munjal Shah. The data show how many items sold at different price levels, correlated with days of the week, time of day and various merchandising factors.

Shah thinks we are witnessing the birth of data analytic services that will piggyback on eBay much the way Bloomberg News and other data providers piggybacked on the New York Stock Exchange. But we're just starting to set the kind of standards needed to allow smart retail data analysis, Shah said.

"It's still like the New York Stock Exchange was back in 1910 or even earlier," he said. "Imagine a stock market with none of the tools we use today to trade -- no tracking tools, no P/E ratios, not even stock symbols. Both from a buyer and a seller standpoint, today we are all trading blind."

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