> if PadMapper's approach really is so much better than why do they need to bootstrap themselves with Craigslist-affiliated data?
Because as you said: (massive) network effects. The claim is that they are effectively a monopoly. You can't tell someone "Sure it won't be instantaneous, but if you think you're so much better than Standard Oil, just go out-compete them."
Why? Everyone needs to come to the network owner, and it isn't possible for new competitors to create their own useful network. The network effect is really the exact analogy for information-exchange businesses as physical capital was for businesses selling physical goods.
Except that in one sense the network effect is even stronger: oil wells can be divvied up by a trust-busting government (and will still function) but some networks only work reasonably when monolithic. This is an argument for a monopoly administered by the government (like for road infrastructure) or a private non-profit (like wikipedia).
No, in SO's case, their competitors were physically incapable of entering the market (because they couldn't purchase stakes).
With network effects, the barrier to entry is less for competitors to join the market and there is nothing physically forcing a user to use a monopoly. A great competitor has a realistic chance of entering your market. Plus, a slight shift in public perception and a Monopoly can become a failed business in no time.
Network effects may be a significant impediment to a small business attempting to enter a market, but lets not throw around the 'monopoly' label so easily.
SO only had a 64% market share when it was broken up. Competitors weren't prevented from entering the oil market because they were physically incapable of buying oil wells. It was because SO had enough market share to greatly influence prices through unilateral action, and to threaten business partners with crippling retaliation for dealing with SO competitors.
I would guess CL has, in most classified markets, more than 80% market share. The amount of market share necessary for monopoly powers varies between industries (based, presumably, on the barriers to entry), but I don't think I'm being casual with the term "monopoly". Especially considering the power of network effects.
Is it not obvious that CL can only get away with its crappy UI because it has overwhelming market share? The fact that it is immune from normal competitive pressures is the defining feature.
No its not obvious because I don't have a problem with their UI. Most CL users don't. They have a clean UI that doesn't overwhelm you. Posting is dead simple.
Anyway, at this point, neither of us will convince the other. So... good day to you.
Because as you said: (massive) network effects. The claim is that they are effectively a monopoly. You can't tell someone "Sure it won't be instantaneous, but if you think you're so much better than Standard Oil, just go out-compete them."