I imagine (though have no actual clue) that it's more of an e-mail sharing network between sites. You sign up for site A, the API tracks that and allows site B to see the signup details you entered.

One one level, I can see why sites do it. On another, one inch higher level, I can see how any site implementing it is so shortsighted that I'm amazed they didn't immediately go bankrupt as soon as they started.