I love reading about economic theories and how they relate to and describe the internet and the information economy. An article I read some time ago called Bad competitors are ruining markets everywhere helped clarify my thoughts on the industry. The article makes me even more impressed by the founders of Craigslist than I already was.
It describes how their interest in the utility of information (specifically classified advertisements) has contributed to the collapse of the business model of classified advertising supporting newspapers. According to the English Times newspaper: “Craigslist is a public service as much as a private company. For [founders] Newmark and Buckmaster, the internet has a higher calling than money-making.”
A more recent post Elitist journalism and bad competitors quotes Phil Meyer of the University of North Carolina, who says that “The future of journalism is going to lie with ‘bad competitors.'” Steve Yelvington says that “elitist journalism will belong to those who care more about public service (or perhaps influence, depending on your point of view) than about profit.”
According to the Times article, “Classified Intelligence Report, an industry newsletter, found that in San Francisco the main newspapers lost over $50m in classified revenues in 2004 because of the Craigslist effect.”
The significance of craigslist is not just that it uses the Internet but that it empowers public-spirited motivation. Newmark is what business school people call a “bad competitor” because he appears more interested in serving society than making money.
Hyperlocal is almost by definition something that is useful but not profitable. The Ultra Local Voice blog argues that “If you are ultralocal or hyperlocal enough to be interesting to your community you are almost by definition serving an audience niche too small to be funded by advertising.”
I want Fitzroyalty to have the same effect on the local newspapers the Leader and the Melbourne Times, as well as the restaurant reviews from the Age. In some cases it has broken the story (first reviews of Little Creatures Dining Hall and Ink Seafood Restaurant). In many instances it has provided the only report on an ephemeral local story that is of no interest to the dead tree media and their lame advertising infested internet offerings.
San Diego businessman Buzz Woolley is quoted in the New York Times as saying:
‘Information is now a public service as much as it’s a commodity,’ he said. ‘It should be thought of the same way as education, health care. It’s one of the things you need to operate a civil society, and the market isn’t doing it very well.’
Given that the market has recently demonstrated how completely incompetent, dysfunctional and anti-social it is, no one can be surprised that selfish, materialistic morons neither understand nor care about the information needs of the community. They are incapable of understanding the difference between the intrinsic value and the commercial value of information. I want to turn their world upside down and destroy their business models as I provide a valuable but free service to the Fitzroy community.