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Craigslist (CL) has been the proverbial poster child for friendliness, openness and online cooperation. However, as John Battelle reported first yesterday, CL has apparently blocked Oodle CEO Craig Donato's classifieds aggregator from crawling and indexing CL's listings. Currently, the local marketplace accounts for a large percentage of Oodle's listings (haven't done the count, but it's significant).

It's a bit of a surprise that CL, rather than, for example, would do this. But, on the other hand, consumers need not visit CL if they can get CL + everything else from Oodle. This is the central dilemma for all "destination sites" that permit their content to be scraped and presented by aggregators. Indeed, this is the dilemma for directories and newspapers in pushing their content out to search engine results.

Does it represent more traffic for the destination and its advertisers, or does it ultimately reinforce the value proposition of the aggregator/engine and thus "disintermediate" the underlying content/destination site? The answer is "yes" to both questions. It does deliver more traffic, but it also reinforces the aggregator's consumer value proposition, to some degree, at the expense of the underlying site.

It's quite a dilemma, but it's one that must be negotiated by any site that doesn't have enough "organic" traffic to satisfy its advertisers or that needs to build awareness and usage (almost everyone). CL is in the enviable position of having an extremely strong brand and huge traffic in its major markets. In other words, it doesn't need Oodle. So it decided to make CL the only place users could access its listings (notwithstanding Housingmaps, which is more about fun than money).

So this is a blow to Oodle but potentially not one that is insurmountable for the site. Travel site/aggregator Orbitz, for example, is widely used but doesn't include Southwest or JetBlue flights. So Oodle could well continue and succeed (ultimately, I believe it will be acquired by the newspapers)/

The larger issue here is openness versus the "walled garden." America Online abandoned the walled garden (and is in the midst of a big ad campaign telling the world). But a stealthy new version of that model and thinking — what I call the "invisible walled garden" — still widely exists at search/portal sites (i.e., comprehensive feature sets intended to keep users within the system). There's also the example of the Yahoo! and MSN IM agreement, but one could argue that was defensive.

There's a philosophical debate and also a power struggle that are text and subtext here. Defining Web 2.0 (now something of a clich©), people argue that it's about openness and interoperability. But the real politic of the Internet is still about who's got the eyeballs and who needs them, who's got the advertisers and who wants them.

The whole MSN-AOL-Google-Comcast courtship dance falls into this category as well.


More dialogue and debate from the Oodle blog.

This Post Has 3 Comments

  1. Aggregators (news and classifieds) contend that they are "paying" for the content they aggregate by referring traffic to the content generators. Low clickthrough rates, however, may not be sufficient "payment" to offset disintermediation by the aggregators. If newspapers can not continue to support original content creation and classifieds postings sites lose critical mass of contributors, what will aggregators aggregate?

  2. Here's Craig Donato (CEO of Oodle's) response in the context of a pretty lively debate on Battelle's blog:

    What's getting lost here is what's best for consumers. I think being open is good for consumers.

    People want to see all their options. This is especially important for classifieds:
    – the market is fragmented
    – listings are perishable inventories of one (a job opening, available apartment, used car)

    If I'm looking for an apartment and don't see the listing for my dream place, it's gone and I never even knew about it. Comparatively, this is much less of an issue when I'm shopping for a new digital camera (where I can go into any one of ten stores and buy what I want).

    A similar argument can be made for consumers placing ads. They want to reach the biggest audience so they can get the best deal. Services like Oodle that help bring prospects to consumers listings are helping them not hurting them.

    I believe that Craigslist has the right not to work with Oodle. But by helping consumers find listings on Craiglist, I believe Oodle positively contributes to their service.

    Posted by: Craig Donato at October 14, 2005 01:35 PM

  3. I'm not sure this is a simple just "what's best for consumers". The underlying "contract" with the consumer that supplies the content, and the publishing mission and model of the aggregators are very important, imho.

    CraigsList has won an admirable trusted position with the consumer, in part on the assumption of a community which is understood and proven to not violate some (mysterious!) "order of things" that has controbuted to their amazing success. Craig should rightly be careful to sort out its (implied or real) contract with its users, and it's up to "him" to gauge the terms by which those community covenants are assimilated across the net.

    If the consumers feel violated, they will reject the community, and having this be "the only answer" isn't any more right than (ugh) walled gardens. If Oodle turns around and takes direct consumer submissions "on the backs of craigslist" then CL has the right to assess the risk and value of a predatory model to the community they have created over the years.

    I honestly don't know the nuance, but the debate deserves to rise above "open is good" simplification. And it's a fun and important one to watch. Glad you're keeping on top of it.

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