It's long been remarked that Craigslist is to newspapers what Wal-Mart has been to America's local businesses: a ruthlessly efficient leviathan that robs older businesses of their capacity to generate revenue. But Mark Gimein has a piece in The Big Money that illuminates a key difference. While Wal-Mart is bent on maximizing returns for its shareholders--an appropriate goal, for a corporation--Craigslist is not. Instead, Gimein explains, Craigslist doesn't even try to profit from its economic activities, because its owners are devoted to a form of libertarian ideology:

For all the stories written about Craigslist and the profiles of its founder, the company can still baffle anybody trying to make sense of it. A telling episode was the performance of Jim Buckmaster, the CEO who runs Craigslist day to day, at an investor conference where he was asked to explain the company's strategy for maximizing revenue. Buckmaster answered that it didn't have one... or want one because that wasn't the point.

[Ellipses in the original.]

Instead of profits, Gimein shows, Craigslist's owners manage the organization in the service of an idea.

A lesson that it was hard for [me] to learn," [founder Craig] Newmark told Charlie Rose, "was that people are good and trustworthy and moderate." Craigslist is Newmark's vote of confidence in that lesson. ... Bad things don't come from what two individuals decide to do together. They come from the institutions that stand between them.

As Paul Starr has explained, newspapers only flourished during the past few centuries because they functioned as intermediaries between readers and advertisers--fundamentally, they survived because they were institutions that stood between people.

Now, along comes Craigslist, which sees cutting these sorts of intermediaries out of the equation as a form of public service. It considers that mission so important that it is willing to forego huge potential profits and compete against classified pages everywhere while charging virtually nothing for what it offers. In that kind of environment, it's pretty ludicrous to think that newspapers could survive.

--Barron YoungSmith