I’ve been thinking a lot about the evolution of the online business model and my thoughts are not too different from what Raj Kapoor says here:

I believe Not for profits (non-profits) are disrupting for-profits on the internet. These organizations – often started by a community-oriented founder – create a simple application or database, grow their user base thru word of mouth and community and eventually use the community to crush all the for-profits trying to provide a similar product.

via the vc in me….: The Not-for-Profits Strike Back.

His examples are the same ones I thought about– Craigslist, Linux, and Firefox.  I also took a hard look at a lot of successful cooperative type businesses in East Bay too.  Also, I looked at some of the exchanges like CME, which was initially a non profit.  The NYSE was created by a bunch of brokers.  These are both for profit now.

Although my thinking isn’t complete on that matter, where I left off is that when cutting edge technology is not a competitive advantage (no tech arms race), a cooperative model might be the most sustainable model in the next generation.

So search is a tech arms race but something like eBay that depends on network effects/ two sided markets, and not really much technology to drive the business, a cooperative model might be a better fit.