Well, that solves one mystery of the universe

I’m not sure when I first heard of Craigslist. I think it was sometime this year. It’s probably the biggest up-and-coming website there is, and while it’s a way of life for some (people have used it to sell everything they own, including their house, then move to a new city, find a new place to live, a new job, and new stuff to fill it) a large number of people have never seen or heard of it.

What I’ve always wondered is how what amounts to a free classified ad board makes money.It turns out it makes its money from the job postings. Prospective employers have to pay for their ads. The rest of us get to freeload. And I do; I’ve sold stuff there, and I’ve bought stuff there. I’ve placed wanted ads, and I’ve bought stuff there that I knew I could resell for a profit elsewhere.

A lot of people don’t like the site because it’s basically all text with virtually no graphic design. Other people like it for just that reason. Personally, its minimalist design doesn’t bother me at all. It’s a free ad service, it’s easy enough for me to find stuff on it, and enough people use it to make it worthwhile to look there and post there. What more could you want?

Supposedly, the up-and-coming Google Base is going to take aim at Craigslist. Others think it’s an Ebay killer. We’ll see. Based on the few vague descriptions that are out there, it’s not clear to me exactly what it’s intended to do yet.

Personally, I’d rather see Ebay get some real competition. Amazon and Yahoo have launched auction sites, but no one comes. People list at those venues basically as an afterthought. I’ve picked up some bargains both places, but it’s rare enough that anything I’m interested in turns up there that it’s been months since I’ve looked either place.

Ebay is big and successful and you can find almost anything there, but it’s almost too big and too successful. Its fees are high, and if you use Paypal, you essentially pay the fees twice. What we’re seeing is the classic monopoly problem: The company is so dominant, the only way for it to gain revenue is by raising its fees, so it raises its fees every year. The people who make their living on the service protest, but there isn’t much they can do about it; packing up and going elsewhere won’t work because there’s nowhere else to go. So they work harder.

Competition would be good for everyone. It would force Ebay to lower its fees and find other ways to improve its experience, and maybe the competing product will be better too. Imagine what the auto industry would be like if GM didn’t have Ford and Toyota around to keep it honest.

What about Craigslist? Well, if it goes by the wayside, it was fun while it lasted. But I suspect it, too, will adapt.

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