There was a great article in the times on Craigslist–

Hey all- I think you’ll love this article; I certainly love Craigslist– but I also think there is something to their strategy that the bankers aren’t getting: If they “monetized” their product more effectively, they would likely lose customers. If they had done it early, there would have been a dozen copycat sites trying to compete with them. And when there are duplicates of online social network resources, everybody loses. The value of a social network increases with the square of the number of users (says Metcalfe’s “new law” for social networks.)

Their strategy, I believe, is actually more sustainable in the long run. No one can undercut them, and there is only ever one craigslist, which makes it tremendously more valuable than it would be if there were two. Read the article below (and the one linked above), and all of this will make more sense. Oh, and if you didn’t get the joke in the title, you can go here.

Full text here

Craigslist Meets the Capitalists

Jim Buckmaster, the chief executive of Craigslist, caused lots of head-scratching Thursday as he tried to explain to a bunch of Wall Street types why his company is not interested in “monetizing” his ridiculously popular Web operation. Appearing at the UBS global media conference in New York, Mr. Buckmaster took questions from the bemused audience, which apparently could not get its collective mind around the notion that Craigslist exists to help Web users find jobs, cars, apartments and dates — and not so much to make money.

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

“I think a lot of people are catching their breath right now,” Mr. Schachter said in response.