April 2, 2006 Business / Your Money: Death by Smiley Face: When Rivals Disdain Profit NYT By RICHARD SIKLOS Ventures that simply want to cover costs - like Craigslist.org - are illogical in commercial terms. But they have the competition scratching their heads.
>There is another breed of rival lurking online for traditional media,
and it is perhaps the most vexing yet: call it purpose-driven media,
with a shout-out to Rick Warren, the author of "A Purpose-Driven
Life," for borrowing his catchphrase.
> These are new-media ventures that leave the competition scratching their heads because they don't really aim to compete in the first place; their creators are merely taking advantage of the economics of the online medium to do something that they feel good about. They would certainly like to cover their costs and maybe make a buck or two, but really, they're not in it for the money. By purely commercial measures, they are illogical. If your name were, say, Rupert or Sumner, they would represent the kind of terror that might keep you up at night: death by smiley face.
>Probably the best-known practitioner is Craigslist.org, the online
listing site. Although it is routinely described as a competitor with
— and the bane of — newspaper classified ads, the site is mostly a
free listings service that acts as a community resource. When the
company contemplates imposing fees for using its site in a particular
city, as it has recently in New York, it does so cautiously and
thoughtfully, as a means to weed out real estate brokers who are
abusing the site by posting their ads over and over.
>The twist about Craigslist and its ilk is that their egalitarianism
could make them very valuable someday — although Craigslist's founder,
Craig Newmark, has proclaimed no interest in cashing in. EBay, no
doubt sensing the commercial potential, bought a 25 percent stake from
a former employee last year. Other examples are the "for sale by
owner" Web sites that have cropped up across the country, in which
people can sell their homes at a cost that is a small fraction of the
usual broker's fee. <
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Jim Devine / "There can be no real individual freedom in the presence
of economic insecurity." -- Chester Bowles