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Hubris 2.0

Ever since the economy started to tank there’s been a lot of blather online about whether the so-called Web 2.0 era is coming to an end. To the extent that “Web 2.0” is defined as a business model that relies on user-generated content to drive high-margin profits the answer is clearly “no” – all one has to do is look at the burgeoning growth of Facebook and Twitter to see there is still gold left in them ‘thar hills (though, in fact, neither Facebook nor Twitter have figured out yet how to mine that gold…). The poster child for successful Web 2.0 business is probably craigslist (they prefer the lower case c don’t you know). Last year CNet published [estimates] that the 30 person company generated $80 million in revenue – which works out to an astonishing $2.7 million per employee – and could well double that amount this year. Or maybe not. That estimate was made before craigslist came under scrutiny by various attorneys general and the dreaded mainstream media for their lax oversight of some of the shadier content on their site(s).

Watching the initial [response] of craigslist owner Craig Newmark and CEO Jim Buckmaster to the shitstorm that erupted following the arrest of the “Craigslist Killer" (who used the site’s prostitution ads to connect with his victims) was remarkable. Cloistered away in their little Silicon Valley bubble they clearly hadn’t a clue about how to manage the scrutiny of meatspace media and ambitious law enforcement officials looking to score. At first they refused flatly to make changes to the way they did business, falling back on the Web 2.0 mantra that the craigslist community would police itself (after all, users provide the content for free, why shouldn’t they also provide the editing for free?). Then, when it became clear that Newmark & Co. were heading to court and maybe to jail on fraud charges, they acquiesced and agreed to change the way they manage listings for adult services – including hiring additional staff to screen out illegal material.

But at least one AG is not satisfied and has threatened to initiate criminal action against craigslist if they don’t remove even more objectionable material from their site by this Friday. Today, Buckmaster [responded] to the Attorney General of South Carolina in a blog post (of course) and just when I thought they couldn’t be more clueless about how to handle this PR disaster he surprised me. Instead of doing what any mature company would do in the face of aggressive policing (think Microsoft and the European Commission…), i.e., aiming to get the moral high ground by swiftly agreeing to meet or exceed demands for cleaning up their sites, Buckmaster demands an apology from the Attorney General, challenges the AG to prosecute South Carolina newspapers that also run off-color ads (and suggesting that he won’t because of cynical self-interest) and offers what I’ll call the “me-too” defense: craigslist shouldn’t be singled out for abetting indecency because all the other kids in the playground are doing it too! The PR trainwreck thunders on.

Sensing that this has the potential to tame the Web 2.0 golden goose that drives so much revenue with so little managerial oversight and cost, some of the New Media machers are weighing in with support: Mike Arrington at [TechCrunch] urges Buckmaster to “Stand firm. Don’t back down. In fact, just turn off the South Carolina site entirely and ban IPs from that state. Forever. And if they press criminal charges, fight it with everything you have.” Then, with a little less bravado, “And if you do end up in jail, don’t worry. I promise to visit at least once a month, even though it will be in South Carolina.”

New Media gadfly Jeff Jarvis takes time out from dancing on the graves of newspaper journalists to [offer], “And so, once again, the internet becomes a threat to the control and power of an elite and they are exploiting craiglist – and the murderer who used it – to reassert their control. But it has the marks of a witchhunt.” Jarvis doesn’t seem to get that the “elite” is law enforcement and the issue is violations of local decency laws. Minor matter.

Perhaps one of Buckmaster’s friends (does he have friends?) could suggest that he take some of that huge profit he makes from the site and hire a decent flack. And a lawyer.

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