Elgg has an extensible API for developing and exposing RESTful webservices. We can expose our own custom functions as webservices via this API by building a plugin for Elgg. We can either publish these services so that other developers can build clients to use them or we can provide our own clients for users.
Even though Elgg has a powerful framework for building own webservices, currently it lacks in providing standard social webservices such as posting a blog post, uploading files, getting status updates, notifications etc.
We can find similar style webservices provided by other popular sites like flickr, twitter, facebook. Also we can find some very useful client apps that use these webservies and provide course grained services for user which are very useful for the users. Some of them are TweetDeck, Tweetie.
So by using the API provided by Elgg many webservices, as much as what other similar sites offer, can be defined.