Why spend money to develop applications when you can get others to do it– for free? Seeing the positive effects of engaging third party developers, hardware makers and Internet service providers are jumping onto the bandwagon of open source.

A little more than week since it announced a layoff of about 1,500 employees, Yahoo! decided to open its platform to outside developers, enabling them to build a more customized network as part of its Yahoo! Open Strategy plan. Developers can now use Yahoo’s data on their web sites and deploy new applications into Yahoo.

The interesting thing about Yahoo is that the openness is not just technical, but integrated with social networks. Jay Rossiter, senior VP of Yahoo! Open Strategy says:

Most obvious will be the social aspects. At a high level, we’re rolling out a social platform that will draw on the hundreds of millions of connections on Yahoo! – everything from random encounters with someone who commented on the same photo as you, to deep connections you have with friends who know nearly everything about you.

Obviously, these companies are not inviting third party developers out of the goodness of their heart. Yahoo! is trying to benefit from the open strategies that helped boost Web 2.0 startups. Facebook, for instance, has been extremely successful in attracting small companies and individuals to develop applications.

On a somewhat related note, HP recently released development guidelines for its TouchSmart PC, allowing anyone to create touch-friendly applications. HP is not following the iPhone model– all applications will be free to download– but in turn, it gets to host a community site of talented developers, thus gaining a resource pool of people who are both users and developers. Smart move.