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Twice in the past month Google has caused a bit of a stir with their APIs. The first happened when they started charging for their AdWords API and the second when Google said Goodbye SOAP Search API.

Ron Drabkin gives an excellent summary of the AdWords issue over in VentureBeat’s The Google API kerfuffle, and what it means for start-ups. The primary debate isn’t over whether charging for the API is warranted but more specifically what sort of pricing model meets the needs of the provider and third parties as well as what implications does this have for Google’s other APIs. Ron’s company, Adisem, is one of a number of startups building applications on Google’s APIs and one of things he highlights is some complex pricing model.

Going forward, however, the new API expense could prevent startups and established companies from offering many services based on the AdWords API. In addition, several ad agencies have also decided to scale back or eliminate API efforts, since they find it less costly for them to hire analysts, usually in India, to crunch numbers on large spreadsheets…The structure of the API fees will also significantly impact several areas of the software industry. Since API cost scales with frequency of access, there are very negative implications to companies who would like to use Google data in a real time web analytics platform. Given that Google offers a free low end analytics tool, could this be a hint that Google will be targeting higher end web analytics in the future?

Venture investors would need to be aware of how open Google will be with APIs going forward. Any startup that is working on a mashup that would take information from Google via an API would have an increased level of risk. (What if Google begins to charge for the spreadsheet API, or the maps API?)

Perhaps the most puzzling thing for those of us in the AdWords management business about the AdWords API charges is that it will prevent us for developing code that would improve results for the advertisers, ourselves, and Google as well. As an example, one very common request from Adisem customers is to help them populate the ‘long tail’ of keywords, which improves relevancy (and Google revenue) by serving ads where there were none before. Since there is now a charge per keyword, we are actively discouraged from doing so.

As for the debate over ending SOAP Search API support, discussion continued since our last post, with further feedback like at franklinmint.fm. And in a space as competitive as search, when the number one player makes this sort of move it creates opportunities for the competition. Take for example how the Yahoo! Search API team reminded developers their API is still supported and ready for use.

Finally, one angry response to the news was to build a custom page scraping interface that recreates many of the old SOAP API calls. And you can find it at EvilAPI.com.

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