They're established, they can start charging and as far as I know they already are for some categories. They've not got a chicken and egg problem. So I'm not sure what's so 'unbelievably weak'.
On a side note, Joel Spolsky was arguing the same point a couple of weeks back on one of the SO podcasts. He obviously said a lot more, being Joel. I'm paraphrasing poorly but one of his better points was that there's a certain amount of potential money in CL that at the moment is being spent on the very small social good of totally free listings. But he lamented the fact that it used to be spent on the much greater social good of journalism, which is a waste as people don't really need free listings, but they need good journalism for a healthy democracy:
They went on to conclude charging on all categories in CL was inevitable to stop the spammers and perhaps they could use the extra revenue to start funding digital journalism.
That was a great podcast and it had me thinking. But what had me thinking more is when I found out that Joel is also subverting journalism with his million dollar plus in yearly revenue job board: http://jobs.joelonsoftware.com.
That's really a great point but Joel's board is not exactly the same as Craig's list. Joel's point was that Craig removed the revenue from classified ads, when the money was being used for the public good. He acknowledged that the classified ads market was fair game, but he disagrees with Craig's view that he's doing the most good keeping it free.
I think there's a notable difference to Craig's list being free vs Joel's job board costing hundreds of dollars to post. ($400 iirc) With Joel's board he's inviting competitors to under cut him, and there's still a thriving job market outside of his control. Craig's list on the other hand could be argued that by keeping the cost to zero he's making it difficult for anyone to make money off of classified ads because there's always a place to go for free ads. And if nobody else can make money at it then they can't have the option to fund Investigative Journalism and democracy and all that.
I do fail to see why any other industry couldn't fund reporting, but classified ads were a good fit.
Now I really enjoyed the argument he made, but I think Joel should put his money where his mouth is. Joel never argued that Craig should fund reporting as a good business decision, he argued that if Craig wants to serve the greater good (which Craig argues he does) funding reporting is a better way to do it. I'd like to see Joel take a % of his job board and fund the greater good. Part of the problem is how does one help fund investigative reporting? I'd say invest in a newspaper but they might not be the best source. He should run some experiments, hire an investigative blogger, start a grant program for reporter interns, stuff like that. It's his money, but this is obviously a topic he feels strongly about.
And there always will be a place to go for free ads, now that it's been noticed as a good idea for a website; whether it's Craig's implementation that survives or not makes no difference. The cat's out of the bag: classifieds can be free.
A lot of people are making money off of classified ads: it's just that they are individual small-time arbitrage entrepreneurs and small retailers, as well as people getting rid of extra stuff, not newspaper monopolists.
as far as I know they already are for some categories.
The fact that CL is already doing the thing that Godin just descended from the sky to tell us CL should do is, to you, evidence that this isn't 'unbelievably weak'? Will you start reading my blog if I promise to fill it with gems like "What if Google started matching ads with searches?" or "What if Amazon started up an affiliate program?"
For the record, I think Spolsky can be pretty unbelievably lame, as well. People have been talking about how CL should monetize for years.
On a side note, Joel Spolsky was arguing the same point a couple of weeks back on one of the SO podcasts. He obviously said a lot more, being Joel. I'm paraphrasing poorly but one of his better points was that there's a certain amount of potential money in CL that at the moment is being spent on the very small social good of totally free listings. But he lamented the fact that it used to be spent on the much greater social good of journalism, which is a waste as people don't really need free listings, but they need good journalism for a healthy democracy:
http://blog.stackoverflow.com/2009/09/podcast-67/
They went on to conclude charging on all categories in CL was inevitable to stop the spammers and perhaps they could use the extra revenue to start funding digital journalism.