Amazon Sues Alexaholic…Everyone Loses

Alan Graham published a great account of my discussion with Jeff Bezos about Alexaholic (now Statsaholic at the Web 2.0 Expo on Monday. Entitled Amazon sues Alexaholic…Everyone Loses, Alan’s blog entry does a good job of summarizing the the conversation, with a lot of background on the controversy to boot.

Jeff and I spent most of the time discussing Amazon’s web services like S3 and EC2, and just how seriously Amazon is taking the idea of the web as platform, but at the end, the subject turned to the lawsuit Amazon filed against Alexaholic. I pointed out that when Paul Rademacher launched, the first Google Maps mashup, Google didn’t sue him, they hired him, and created an API to make it easier for others to follow in his footsteps. Given the additional visibility and utility that alexaholic/statsaholic has given to Alexa (which is owned by Amazon), I asked whether a similar approach wouldn’t be better here.

While I largely agree with the sentiments that Alan laid out, to wit, that it would be far better for Amazon not to be suing Ron Hornbaker, the creator of statsaholic, I do think that it’s important to clarify a few points.

First off, I didn’t surprise Jeff with the question, as Alan intimated. Jeff and I talked about the issue at length backstage before the presentation. And while we still disagreed, I think that there’s more substance to Amazon’s position than you would get even from Alan’s relatively thoughtful piece, let alone from rants like this one from Pete Cashmore. My regret is that I didn’t ask the question earlier in the session, rather than right at the end, when we didn’t have time left to get into the subject in more detail.

Here are a couple of the points that Jeff made to me backstage:

  • Unlike and other Google maps mashups, which add value by combining data from multiple sources, statsaholic competes directly with alexa, offering only their data.
  • Also unlike Google maps mashups, statsaholic originally used a name based on alexa’s own, and has continued to do so despite requests to do otherwise. While Ron did change the name, he did retain the alexaholic domain, and still uses it to drive traffic to his site. (He originally just did a redirect. Now he has text there that points people to the new site.) I can see Jeff’s point. I doubt very much that Google would have been so tolerant if had been called
  • Alexa did negotiate in good faith with Ron about acquiring the domain. Ron confirmed this with me when I talked to him about the situation on the phone. While neither Jeff nor Ron would tell me the price, what I was able to glean by inference suggests that it was a fairly substantial price for a domain name. Ron turned down that offer.
  • This is not a case of Amazon offering an API, and then turning on a developer when they build a successful site with it, as Pete Cashmore incorrectly asserts. The Alexa API has apparently never provided access to the Alexa trend graphs. As one commenter on Pete Cashmore’s blog entry about this (link above) noted: “Alexa’s graphs are copyrighted, so simply hotlinking to them is illegal and using their bandwidth for statsaholic’s benefit. If he wants access to the data to make his own graphs, Alexa provides a web service to do that (at a small cost per query-$.15/1k queries). This pay-as-you-go service is like all of the other web services Amazon provides so I don’t really see how this is going against what Amazon’s platform is all about.”
  • When I asked Jeff about Alexa’s refusal to offer an API to directly generate the graphs, as Ron has asked them to do, he said “This may be a bad business decision, but it’s their decision.” (Note that the word “their” refers to the Alexa management team. I was intrigued to note that Jeff always referred to this as an Alexa decision. I don’t think that this was just plausible deniability though. I’ve seen strong signs in a number of my interactions with Amazon over the past few years that Jeff has become a strong delegator, and very reluctant to over-ride the decisions of his managers.)

In short, I ended up with a lot more sympathy for Amazon’s position than I expected to. If someone decided that they could make a nice business by re-using the content from O’Reilly books in a new, more accessible form, I’d probably be miffed too. I’d be dumb not to jump on the opportunity if I saw signs of uptake, but it would be my call as the copyright holder. And if they used my name in building their service to boot, and refused to stop when I asked them nicely and even offered them money, I might eventually have gotten pretty angry too.

It appears to me that both Alexa and Ron Hornbaker have been acting somewhat foolishly here. Alexa should have taken an early lead to bring Ron into their fold, as Google did with Paul Rademacher and other Google Maps hackers. They should have also learned more quickly from the user-interface innovations that he pioneered, rather than waiting so long to adopt them. And they should definitely be looking at how to use web services to syndicate their graphs more widely. With companies like hitwise and quantcast using traffic graphs as a key marketing tool, better syndication is a key competitive tool.

Meanwhile, Ron should have been more flexible and respectful. It is, after all, Alexa’s data that he’s using — and only that data. He’s trading off their name and the service that they built. The value that he added was in user interface and usability (the ability to compare multiple sites, rather than the simple pairwise comparison that Alexa itself provided.) When they made him a nice offer, he should have taken it. And he should have worked harder to build out differentiated value in the site, so it isn’t just direct competition for Alexa’s own offerings.

I don’t imagine that Amazon will now be willing to roll back the clock and repeat their offer, but I’m hopeful that they and Ron will at least be able to come to some kind of settlement. Ron can’t afford to go to court, and Amazon can’t afford to suffer the kind of PR black eye that this will give them, whether undeserved or not.