One path towards innovation
This begs the question on how to drive innovation within a company the size of eBay, MS, Yahoo or Google. Here at eBay, as in any large company, there are limited resources we contend with. Ultimately our process focuses on placing bets on projects that offer the most potential return. It's a sound rational way of doing things, especially when resource constrained.
That said, as I've posted in the past, innovation is about throwing a hundred ideas on a wall and hoping things stick. Offering a web services platform is great first step since multiple 3rd parties step into the fray and take the risk a corporate entity can't (whether because of margin constraints, potential revenue cannabilization or limited ROI). The investment in the platform reduces the cost of future development, increases flexibility of internal applications and drives 3rd party adoption of your standard. But mulling it over, I think web services is still a first step.
Even as a collective, innovative startups have their own significant constraints (namely financial and marketing resources). Unless the web service provider supports these third parties through distribution or marketing, a lot of this potential innovation simply ends with potential. In some ways, Google's approach towards enabling their engineering staff to focus 20% of their time on new ideas emulates the dilemma startups face. Without real marketing support, the majority of these concepts start to die on the vine if they don't get great initial adoption or go viral (Orkut/Urchin/Pages vs Gmail).
Effectively integrating marketing or distribution of 3rd party applications with a web service platform seems a solid path towards innovation for a large(r) company. As one example, we worked with BonfireMedia (a 3rd party wireless developer) to power eBay's WAP, Java and BREW applications for mobile phones here in the U.S. Once signed we worked jointly to extend eBay Wireless' reach across all major carriers, making eBay Wireless one of the most downloaded/used wireless apps in the market. Thanks Alex :)