Some facts about Amazon:

• 31 million people bought something on Amazon last year
• 21% of the transactions on Amazon are merchants other than Amazon
• The Amazon Web services API allows developers who are not Amazon employees to use the platform.
• Amazon has spent about $900 million on technology.
• Associates program is second most successful marketing program. There are 900,000 associates in the program (I represent two of those IDs).

The Amazon Web services platform comprises three APIs:

• Selling API
• Merchandising API
• Ordering API

For this to be more than just an interesting playground for geeks, Amazon has to provide an economic model that works for other business. That's the only way that they can use outside development effort to leverage their technology investment and encourage 3^rd party innovation.

Amazon got into this through their "Amazon Recommends" program that they made available to associates. They found that many people were screen scraping the HTML and decided to just send them XML before they converted it to HTML. The associates program already had Amazon thinking that working with partners was a good way to do business, so Web services is just a way to enable that. I think its interesting to note that the desire to cooperate came first. If the associates program had fizzled, Amazon wouldn't have embraced Web services easily.

The key thing for Amazon goes beyond merely cooperating with partners, however. Amazon is the 800 pound gorilla, so what they're creating is a platform instead of an application. Tim Oreilly likes to say "a platform strategy beats an application strategy everytime."