The quiet deprecation of Google's original SOAP search API earlier this month, which has just come to light this week, is a revealing admission of Google's single-minded reliance on advertising as a means of funding its continued growth and profitability. Put bluntly, it confirms Google's abject failure to monetize its API except by the indirect mechanism of contextual advertising. Thus Google is now asking developers to sign up instead to an AJAX API, which presents ads on a user's screen alongside the requested search results. That's no use for the API mashups that Google's SOAP search API was one of the first to popularize, long before the term 'mashup' existed.
Google's track record is in stark contrast to Amazon, which has had several APIs emerge from (sometimes long-running) beta programs as pay-per-use commercial propositions, and is now building a serious business around those APIs, serving an expanding community of developers.
I long ago said that the key to monetizing Web 2.0 was to develop the necessary technology to measure and charge for API services based on usage (including search), instead of relying on advertising.
By choosing instead to monetize its search engine by the indirect mechanism of advertising, Google has shifted its center of gravity away from search and towards advertising (for which, incidentally, there is still an actively supported SOAP API that many of its larger advertising customers make extensive use of).
What this means is that Google's long-term future is as a leading on-demand advertising engine, and that if it survives it will be by providing contextual advertising to other content platforms, including other search engines — while its own search engine gradually declines in popularity until it ultimately withers away.
It's altogether possible, however, that Google will make the calamitous strategic error of continuing to believe that its search engine is as core to its business as its advertising engine, and will seek to increasingly retreat into a Web 1.0-style walled garden of its own primary content. Such a decision would put it on an identical trajectory to AOL's in the Web 1.0 era — probably culminating in an eye-wateringly large and hitherto unthinkable acquisition, such as taking over Disney or News International to expand its content empire, while leaving rivals free rein to undermine its position as the pre-eminent advertising engine for the wider Web.
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