MORE: (6th comment)
Seth, I don't think people would have to think those things right away for the non-profit to eventually be a big success (and put its for profit alternatives out of business). The non-profit would just have to do right by its users... and keep doing it!
For instance, if it charges for ads or allows ads on the site to get revenue --> just tell the users what that money would be used for and *do* that! as long as it goes towards serving them, great! if it keeps doing that... the word is gotta get out at some point!
I find it hard to believe that none of the effective media outlets (in terms of publicity) would report on the uniqueness of it: "little people$list has spent the 20K -- or whatever amount they were able to raise through ads -- on developing a sophisticated way of protecting the users' information against unreasonable government searches."
This is how craigslist got all that great and free publicity early on (and still gets it, 'cause reporters continue to be taken for a ride, as far as I can tell): by being UNIQUE (by being something the media wrote about *without* having to spend money on PR).
P.S. What I'm basically saying: the way to beat Craig (and his equivalents) at his own game is to DO what he *says*! BE the community service with a philanthropic mindset...
The for profit craigslist (or other similar entreprises) would eventually become irrelevant: who would put up with the retarded development of the site if they HAD an alternative? Who would choose NOT to have their information as protected against unreasonable government searches as possible... if they HAD an alternative? etc. etc. D.
I'm not sure what you mean, Seth. (third comment, followed by Seth's answer)
What burden? what people? Why would people working for non-profits that are paid the market salary etc. get any more tired or distracted or sloppy as far as researching things, if that's what you mean...
PR is not the end and all of everything: I don't think a non-profit would need to outspend the for profits, PRwise (that should be the least of their concerns since they wouldn't have anything to cover up).
Imagine craigslist would have stayed NON-profit. Would have done *exactly what it does*, EXCEPT *much much* better by spending huge net profits on figuring out how to best safeguard users info, among a host of other things important to the users. It could spend millions and millions on it! --> that would put the for profit alternative, that would just pocket all those profits (like the for profit craigslist appears to do) out of competition, as far as I can see...