Tapping a Legion of Smart Programmers

A startup called Mashery is helping companies take a page from Apple, Facebook, Twitter, and others to enlist the aid of outside software developers

By Douglas MacMillan

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Apple (AAPL), Facebook, and Twitter are among the bleeding-edge tech players generating buzz—and a buck—by enlisting the aid of legions of independent software developers.

The idea is catching on. Now companies from such industries as retail and media—as well as tech—are rushing to give outside programmers an incentive to build new products and services for them. To do that, they're turning to a San Francisco startup called Mashery.

Founded in 2006 by Oren Michels, Mashery is helping about 70 companies share their inner software workings with outside developers, who in turn can use that information to build tools and products more quickly and cheaply than the companies could on their own. "Most companies don't have as their core competence running a Web site or developing user experience," says Michels, whose clients include the New York Times (NYT), Netflix (NFLX), Best Buy (BBY), and Nielsen-owned Billboard magazine.

A Boom in Open Web Platforms

Open platforms, pioneered by such Silicon Valley giants as Amazon (AMZN), eBay (EBAY), and Salesforce.com (CRM), have been around for years. But the number of open Web platforms, called "application programming interfaces" or APIs, rose to 1,400 in August, from just 55 in 2004, according to the site ProgrammableWeb. Part of the impetus comes from companies eager to reach more Internet users in more ways, says ProgrammableWeb founder John Musser. "The future of the Web is all about decentralization—people don't always come to you," he says.

That realization led Best Buy in January to launch Remix, a platform for outsiders to grab real-time information about the retailer's pricing and inventory integrate it into other sites. Now, customers find Best Buy products on sites across the Web, such as Camel Buy, which sends alerts to thrifty customers when certain products get marked down.

At a time when C-suite executives are tightening research and development budgets, the prospect of motivating an army of engineers to work for next to nothing holds particular appeal. "We have a finite number of resources internally," says Netflix spokesman Steve Swasey. Netflix in 2008 opted to share with developers information about movies and users' queues. The move resulted in dozens of applications that Netflix may not have had the wherewithal to develop on its own, including several movie-browsing iPhone applications that popped up the very first day. "Netflix wins because their business model isn't driving traffic to their Web site or selling mobile apps," says Mashery's Michels. "Their business model is selling movies."

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