For those who care about such things, the big recent news is, of course, the Move.com vs. Active Rain dustup.  While much of the commentary amongst Active Rainers has been supportive of their fearless leaders, there is also an underlying angst about the notion that while the content of Active Rain is provided by its 50,000-odd members, the windfall from the prospective sale would have accrued not to those members, but to the owners of Active Rain.  Were Messrs. Mardini, Heaton, and Washburn indeed going to enrich themselves with the fruits of others’ labor?

The question really boils down to this:  wherein lies the value of a community network such as Active Rain?  I say the value is twofold:

1. The community itself
2. The ecosystem that provides value to that community

Without the hard work of the community, Active Rain would be just an empty shell.  Conversely, without the ecosystem that the Active Rain platform provides, many of the 50,000 participants’ blogs would be a fraction of what they are now.

So is it fair for the owners of an ecosystem to profit from the contributions of the members?  Fair or not, that’s the way our capitalist system works:  unless Active Rain was structured as an online collective, it is unlikely that the members would have seen a personal windfall.

Think of two other similar ecosystems:  Ebay and Craigslist.

At Ebay the sellers do all the work of getting a product ready, advertising it on the site,  shipping it to the winning bidder, and rating the buyer.  The buyers do all the work of bidding, submitting their credit card information, and rating the seller.  Ebay simply provides the ecosystem that makes all this possible, and intervenes to deal with disputes and fraud.  Buyers and sellers do all the work, and the only benefit they get is the ability to buy and sell stuff — a great benefit, to be sure, but nowhere near the benefit that Ebay gets of being a multi-billion dollar company.

Craigslist provides not only a platform for buying and selling goods and services, but also for matching employers and employees, renters and landlords.  Again, the community does all the work.  The founder and majority owner of Craigslist, Craig Newmark, could be a multi-gazillionaire many times over, but has chosen to settle for merely millionaire status.  Again, its the owner to whom the economic profits accrue.

We can argue all day — and we have been — about whether Active Rain is worth $30M or not.  What we cannot argue with is the notion that, whatever its monetary value, it rightfully accrues to its owners, not its contributors.

Tags: Active Rain, Craig Newmark, Craigslist, Ebay, Industry, Move.com, NAR

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