Craigslist's one goal in the world is to make a profit. That's it. Everything else comes secondary. If they decide that providing users a service will help them accomplish this, then have them provide a good service (which they do). However, they don't owe anything to any businesses or even any users. If users don't like this, let them go to an alternative. Welcome to capitalism, where the users decide what product they want. (Now if you don't like what the majority of users are deciding, then that's another issue altogether.)
Craigslist is a privately-owned company and was actually a non-profit at one point. In the past Craig Newmark has talked about Craigslist as a tool for community organization and so on. If Craigslist were 100% profit-driven I think it could have made a lot more money off of its huge user base.
That's actually an interesting enough theory that I'd love to test.
My guess is that the site is generally mediocre enough that it would be hard to get more people to open their wallets except for select listing types.
If they charged to view the listings for example, I'd wager that very few people would bother and they'd lose their network effect.
My guess is that they're getting about as much money as they can without offending too many people as preservation of their user network is highest priority, as it is what allows them to keep charging money for the few things they charge for currently.
Just by putting un-offsensive elements such as a single Adsense box on each site they should be able to generate serious additional revenue without experiencing that much of critique. With that kind of traffic and legitimate profile, the un-intrusive revenue options are endless. Just additional fees for highlighted listings, dynamic pricing for a slower decay of a posting, etc. But the beauty of Craigslist is its absolute no-frills approach and consistency over years and years. Reminds me a bit on the success of Drudge. Similarly weathering all storms by concentrating on content and simplicity to the extreme.
I was naively thinking of charging users more money to increase revenue, and while you've pointed out a few very viable ways that they could easily get more wallets open, the real gold mine is likely ad revenue that nobody would bat an eye at.
The targeting/CPM would likely be fairly low, but by sheer volume alone, they'd rake it in I suspect.
I believe that the CPM for ads on Craigslist would be higher than it is for Reddit or Facebook. The key is that people browsing Craigslist are usually there to buy something rather than seeking free entertainment. Advertisers really value audiences who are ready to buy a product in their market.
You talk as if there is perfect market choice - that if a majority of customers want something, it will happen. In the real world, there is not perfect market choice. There are many factors which make it impossible to have perfect market choice. We are probably stuck with Craigslist and LinkedIn for a while, and for the most part, we are stuck with the decisions that their executives make.
It's true that if they do something highly awful, then that might create enough demand for a competitor to take over. But it would have to be a high degree of awfulness to overcome their existing momentum. There are many shades of not-quite-awful, where those companies can make decisions with market impunity.
So considering that we're kinda stuck with those guys, I think the question becomes, why shouldn't we complain if they are doing something that we don't like? Doesn't matter who owes who what. It's our world, we should try to improve it.
You should complain if you really want to, that's part of the market force.
I think perfect market choice is a funny idea. Why would anyone assume the market would function on such a limited plane of understanding, that all you had to do was poll people, you could trust their verbal response, and decide that's what the market should do?
People very often do things in contrast with what they say, even what they believe consciously. There is so much more at play than what people would "vote" for in the sense of a "perfect market choice".
Save it for econ class. A company's goal is to build a sustainable profit generating engine. To allow this, it needs to play a constructive part in the marketplace and community.
A company does not need to provide a constructive part of the community to achieve their goal of profitability... they just have to provide something that some segment of the population is willing to pay for, or build in a degree of lock-in that guarantees continued profits.
For example, It's probably fair to say that Monsanto is not a constructive part of the marketplace and community, but they sure do have a sustainable profit generating engine.
Edit - if you're going to downvote, how about some discussion as to how this comment does not add to the conversation... since I'm sure there was some other reason for the downvote other than not agreeing with me :)
And if they're not a constructive part of the community, the community has every right (I think it's practically an obligation) to berate them for it.
Just having a business plan and making money should not protect you from criticism or absolve behavior detrimental to the general community! Yes, legally Craigslist has no obligations; that's why nobody's litigating. I argue that morally (at least from a utilitarian standpoint), Craigslist does have an obligation to play nice. And so I welcome critical blog posts and bad publicity.
Oh, I agree 100% that if the community disagrees with the behavior of an entity they they have every right to berate them. And if a company behaves poorly enough, it will open the floodgates for competitors and revenue loss (i.e. GoDaddy during SOPA probably lost an appreciable number of customers).
That being said, in this specific case I think that whether or not there is a moral obligation to let a third party scrape and mix-in your data is very debatable (given that Craigslist does not provide an API).
Sure, people should play nice. And some may interpret playing nice as 'don't scrape other people's stuff for your own startup'. Or at least don't be suprised when they get pissed ;)
You could take tabaco companies, much of alcohol, gambling, TV and other addictive "entertainments", and to the extend that they are enterprises (if not legal), much of the arms trade, mafia / organized crime, illegal drugs trade, and modern banking, as not providing net social benefits. While generating profits.
Lets get to basics, If product was providing value and doesn't anymore there will be attrition to userbase and that is the gist of it. It is also the foundation of wealth building and whatnot. Ancillary benefits, as APIs are, help shallow out the curve of obsolescence or even grow the product sometimes if cards are played right, but that is that...
