Why Did the Price of the Bing Web Search API Increase, and How Does the API Work?
Microsoft is set to ramp up the prices for Bing Search API’s from May 1st in a move stated to “reflect technology investments.”
The announcement follows the tech giant’s multibillion dollar investment in OpenAI which promises to bring revolutionary new ChatGPT features to Bing. It’s a partnership set to revolutionise in more ways than one: Microsoft intends to integrate advertising into its AI chatbot’s responses. So it seems these two revenue streams — API price increases and chatbot ads — are where Microsoft is looking for a return on its investment.
Given that chatbot ads are not quite with us yet, allow us to go into more detail on the API’s. You’d be forgiven for asking: What is an API, anyway?
API stands for Application Programming Interface. In a nutshell, an API is a way for software and apps to communicate and exchange data. The API acts as the interpreters for different programs. While a user interface refers to a human interacting with a computer, an API is an interface allowing two or more software to communicate together.
A key point to understand is that an API is not really the software itself; it’s a software intermediary that allows two applications to talk to each other. It would be better to imagine the API as a type of contract or protocol between two programs. This way, there is no need to constantly exchange or rebuild the whole connectivity infrastructure. An API is used to aggregate data and pass it across completely disparate systems.
Let’s explain that more simply with an example. Imagine you want to place a map to your business on your website. It isn’t possible for you to directly access Google Maps as the code running those sites sits on Google’s servers. Instead, those sites offer APIs to allow authorised users to extract the data. The Google Maps Platform is thus an API that allows developers to embed Google Maps into mobile apps and web pages.
Most SaaS providers offer APIs that let developers write code that both sends and retrieves data from the provider’s site as well. APIs are implemented across almost every industry to satisfy the in-house needs of companies, provide consumers with data, and to ensure regulatory standards. There are private, partner, and public API’s:
Private APIs are for access internally only by an organisations in-house developers. Instead of being open to third parties, they are for the benefit of your own products and services.
Partner APIs are used to interchange between two specific businesses or organisations. Partner APIs are used within business relationships, often to integrate software between partnering companies.
Public APIs are publicly available and can be used by any third-party, without restrictions.
As one might imagine, API’s are particularly important in the mega macro worlds of financial services, manufacturing, telecoms, and government. Traditional techniques are incredibly paperwork-heavy and time-consuming. API’s do away with all that. The 2022 State of the API Report by Postman shows how API currently dominates software development. According to a survey of 37,000 developers and industry leaders in over 130 nations, 59.3% placed participation in the API economy as a top priority. Of those who are already making APIs a top priority:
67.1% work in financial services
61.2% work in software development/internet
60.0% work in manufacturing
59.2% work in telecommunications
55.6% work in healthcare
52.8% work in professional services
44.4% work in the government
The reality is that while the average person in the street might not know exactly what an API is (and even a tech-savvy programmer might struggle to define it!) we all use them on a daily basis — be that checking the weather widget in the morning, following Maps, booking air travel, making a purchase with Paypal, using Gmail to access Linkedin, or using Facebook to access a smartphone game… the list goes on. Last but not least, there’s search API’s.
Search APIs, as the name suggests, allow developers to easily place search capability within apps and sites. They all offer the backend tools necessary to index documents, query datasets, view analytics, and so on. It’s imperative that the data is trustworthy and safe. You have to take both speed and scalability into account when providing the search functionality: your base of users could grow exponentially over time, and suddenly, there’s a huge volume of requests for your search functionality.
Many Search API services start out as freemiums. That cost then builds as users exceed predefined data or usage parameters. The key takeaway is that Search API at the level of business usually incurs a fee. This brings us to the Bing Web Search API. According to Microsoft’s own definition:
“Bing Web Search API enables safe, ad-free, location-aware search results, surfacing relevant information from billions of web documents. Help your users find what they’re looking for from the world-wide-web by harnessing Bing’s ability to comb billions of webpages, images, videos, and news with a single API call.”
The Bing Search APIs let you build web-connected apps and services that find webpages, images, news, locations, and more without advertisements. Bing Search API allows developers to narrow down results by freshness and result type. Search results can be categorised with various levels of customisation for suggested spellings, safe-search, and location results. Bing boasts safe, ad-free, location-aware search results, surfacing relevant information from billions of web documents. A number of independent search providers make use of the Bing Search API, such as DuckDuckGo and the eco-friendly search engine Ecosia.
Microsoft is set to ramp up the prices for Bing Search API’s from May 1st in a move it described as reflecting its technology investments. The announced price increase to the Bing API has not come as a surprise to everyone. As the state of the global economy bites, major players in Big Tech are looking to increase profitability on APIs. Twitter is one such example. The embattled social media company has announced its once-free API will now be charged at $100 per month for the basic tier.
So perhaps it isn’t a surprise that Bing is following suit. Instead, it’s the extent of the price increases that has sent shockwaves. The announced price hike for Bing Search APT is divided across several tiers based on the volume of transactions. Specifically, the number of Transactions Per Second (TPS). 1,000 transactions are free per month for all features and that will remain the case moving forward.
“The existing Microsoft Bing Search APIs will increase in price effective May 1, 2023. The price increase will apply to all markets. Starting May 1, 2023., you’ll be charged the new price for all Microsoft Bing APIs. We periodically assess the value and pricing of our services to meet market demands and align the pricing of our products and services with customer consumption trends and preferences. The new pricing model reflects more accurately the technology investments Bing continues to make to improve Search. The following tables reflect the new prices.”
Beginning with the S1 tier, prices are set to rise from $7 per 1,000 transactions to $25. Image search, currency priced at $7 per 25,000 transactions (pulled images) will also go up to $25. Users on the initial rung are able to choose an Optional Bing Statistics Add-in. This feature will also see prices rise, from $1 per 1,000 transactions to $10. Tiers rise in accordance with each price package and based on the TPS factor.
A comparison of the prices reflects a considerable 3x to 10x increase across different tiers. Major corporations dealing with big numbers better have their accountants ready. The plan tiers work on a pay-as-you-go basis and penalties may be incurred if the number of TPS is exceeded.
Microsoft has been forthright and transparent with its API price changes. While the changes do not come into effect until May, many business leaders and developers will feel justifiably dismayed at the drop of a hat nature of it all. Others might argue that’s just the way things are going in tech right now. Microsoft’s partnership with OpenAI is likely the main factor; doubling or tripling API prices will go some way toward recouping those investments. It has even been postulated that the computing demands of ChatGPT necessitate extensive hardware upgrades at Microsoft. What’s for certain is that the company only last week announced 10,000 job redundancies, cutting almost 5% of its global workforce.