Reaping The Fruits Of Others’ Labor? Or Adding Value To It?

September 28, 2007

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: , , , , , ,

Written by Kevin · Filed Under Active Rain, Craig Newmark, Craigslist, Ebay, Industry, Move.com, NAR 

Comments

13 Responses to “Reaping The Fruits Of Others’ Labor? Or Adding Value To It?”

  1. B on September 28th, 2007 10:02 pm

    Well .. The same can be said of Youtube or any social network but the contributors are not contributing content for free because in exchange for their content they get to use the platform for free.

  2. Brian Brady on September 28th, 2007 10:53 pm

    Active Rain is a free platform, also.

    I agree with you, Kevin. The eco-system is the value and the contributors have no claim on any windfall.

    So, we have to go back to the valuation (or the story becomes less interesting).

    $600/ user?

  3. Sock Puppet on September 29th, 2007 6:56 am

    The difference between Craigslist and eBay vs Active Rain, is that Craigslist and eBay are transparent in their business practice. Wanna sell your stuff? You can sell it here. Everyone gets that straight away.

    Active Rain sold their community a philosophy of transparency and community love, all the while plotting to sell the entire thing lock stock and barrel for maximum dollar.

    Obviously at some point Active Rain has to acheive profitabilty and pay the rent. And I agree, deservedly so. But they seem to have gotten a little greedy and it’s all blowing up in thier faces.

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  8. cindy*staged4more on September 30th, 2007 10:43 pm

    As an active blogger of Active Rain, I frankly am glad that Move didn’t buy Active Rain. What I like about AR is that it’s an independent community where people discuss freely about their professions & day-to-day hardship. I have certainly met many in my industry (I am a real estate stager in San Francisco bay area) that I otherwise would had not met and learned from.

    But it’s like Sock Puppet had said: “Active Rain sold their community a philosophy of transparency and community love, all the while plotting to sell the entire thing lock stock and barrel for maximum dollar.” The founders of AR posted a blog about the lawsuit after people started blogging about it on AR, and they explained again it’s all about the members. They aimed to remain transparent to its member. Yet, I read about the almost-ownership-change on Inman? That’s a pretty opaque transparency if you ask me.

    Anything of value is only when people find value in it, like LV are just ugly looking purses, but its branding and royal lineage made them expensive purses that signify value and class. Social media sites come and go, we will see on AR survive this one.

    Cheers,
    Cindy

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  10. Remi on October 4th, 2007 12:20 am

    It says that the ecosystem that provides value to that community.

  11. Kapowich pleased to be included in Craig Mackenzie's Carnival of Real Estate #61 on October 6th, 2007 11:02 am

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  13. Goerge benson on October 18th, 2007 11:29 pm

    Nice post. I love active rain.

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