Yesterday Yahoo announced they are opening up the API to their new search platform (aka “Panama”).

The Yahoo paid search API allows programmers to write code to interact with Yahoo’s ad platform programatically. Yahoo’s former paid search API (”DTC-XML”) was available only to large agencies and advertisers and could involve fees.

In contrast, Yahoo is providing the new Panama paid search API to everyone, and is not charging access fees.

I caught up with Dan Boberg, Yahoo’s Managing Director of Sales Technology, by phone yesterday to talk about this API announcement.

Dan Boberg, Yahoo’s Managing Director of Sales Technology

APRK: Hi Dan. Tell us about opening up the Yahoo paid search API.

DB: Sure. We’re really pleased about this new API as it is really important to Yahoo to provide access to our platform to all advertisers out there. Small businesses, medium businesses, all the way up to enterprise clients, agencies, analytics providers, everyone. Our goal is making Yahoo more transparent and open. And this API is robust: through the API advertisers can use every feature of the Yahoo platform.

We’re are providing this access for free. We are not charging for quota — capacity will be given for free. More capacity than most advertisers will need, in fact. Advertisers who want higher levels of support can pay for that.

At the bottom, you have the platform itself. The new platform is robust, scalable, and fully-featured. On top of that platform, we’ve added a commitment to openness. The API is part of that commitment on Yahoo’s part to transparency and access. And of top of that, we are adding professional grade support — service level agreements, more technical support, collaboration on our product road map, professional services — for those advertisers and agencies who want that.

Search is a multi-billion dollar business. Yahoo has always had search APIs — we launched the first search API in the industry in 2001. This new platform, this new API, and the professional grade support are about taking Yahoo search from the 1.0 to the 2.0 world.

APRK: You’ve announced three levels of support — “basic”, “advanced”, and “elite”. Can you tell us more about those levels? Are these levels just about support, or will “advanced” and “elite” advertisers receive better access to the platform, say, more functionality, higher quotas, faster servers, whatever?

DB: These levels are about support and dedicated resources and service level agreements, not access. All advertisers, regardless of level, will have access to the same platform and the same functionality.

For “advanced” support, we are not charging all that much, $2000 per month. This level provides our partners with more support, more dedicated Yahoo engineering resources should they need support. At the advanced and elite levels, we’ll make specific commitments regarding uptime, and provide our partners with in our product roadmap process.

We don’t provide a specific price for the “elite” support, as it varies by case, and can even involve us putting Yahoo engineers on site.

APRK: Google has taken a different approach. They don’t charge for support, but rather charge a nominal fee for each API action, 25c per thousand API tokens.

DB: We’re interested in best serving our advertisers, and we differentiate from our competition when it makes sense.

Our objective is to make capacity a non-issue. We’ve spent considerable time building a robust scalable platform.

We’ve also spent decent time writing robust documentation and SDKs, with more to come, for smaller developers, and advertisers who want to do it themselves.

We think all advertisers will find this new API easy to use. And for those companies wanting higher level of service, visits from Yahoo engineers, and so on, they can get that as well.

APRK: Thanks for taking the time today, Dan. Good luck with the new program.

What This Means To Advertisers

Eventually, higher CPCs on Yahoo, surely. That would have happened anyway; the API simply accelerates the process.

While major agencies and advertisers (like RKG, for example) have been using this API since it beta’d last fall, this announcement will allow many more advertisers to interact with Yahoo programatically. In turn, this will make the Yahoo search marketplace more efficient, in the economic sense, leading to higher CPCs for Yahoo.

Opening up the Yahoo API will also foster innovation.

APIs let developers “mash up” applications in interesting ways. For example, Google’s API allowed them to collaborate with Intuit, integrating AdWords with QuickBooks.

One would think that application developers who have already integrated Google Adwords into their apps would use Yahoo’s new open API to “snap in” Yahoo functionality, too.

While that may be technically easy, Google’s API T&Cs forbid developers from placing other search platforms on an equal footing with Google, prohibiting a lowest-common-denominator approach.

It will be interesting to see if Google chooses to enforce these provisions hinder developers from collaborating with Yahoo.

What This Means To Wall Street

While an open API will do little to decrease the gap between Yahoo and Google in search share, opening up the Panama API is totally the right move from Yahoo’s perspective.

Right move, right direction, little immediate impact.

Random API Gossip From RKG Engineers

By coincidence, earlier this week, unsolicited and unrelated to Yahoo’s announcement yesterday, the following comments floated up from RKG’s Engineering Catacombs about the various APIs. Didn’t warrant their own post, but since this post is about APIs, tacking those on here.

* Google API: Fast, full-featured, well-considered. Much unexplained downtown, much more than Yahoo.
* Yahoo API: Slow. Operations time out. Good docs. Reliable, high uptime.
* Microsoft API: Fast (perhaps because so few are using it?). Fails hard, without error messages. Fails often.
* Ask API: Scarily insecure. (SQL injection, anyone?)