Craigslist (CL) has been the proverbial poster child for friendliness, openness and online cooperation. However, as John Battelle reported first yesterday, CL has apparently blocked Oodle CEO Craig Donato's classifieds aggregator from crawling and indexing CL's listings. Currently, the local marketplace accounts for a large percentage of Oodle's listings (haven't done the count, but it's significant).

It's a bit of a surprise that CL, rather than Cars.com, for example, would do this. But, on the other hand, consumers need not visit CL if they can get CL + everything else from Oodle. This is the central dilemma for all "destination sites" that permit their content to be scraped and presented by aggregators. Indeed, this is the dilemma for directories and newspapers in pushing their content out to search engine results.

Does it represent more traffic for the destination and its advertisers, or does it ultimately reinforce the value proposition of the aggregator/engine and thus "disintermediate" the underlying content/destination site? The answer is "yes" to both questions. It does deliver more traffic, but it also reinforces the aggregator's consumer value proposition, to some degree, at the expense of the underlying site.

It's quite a dilemma, but it's one that must be negotiated by any site that doesn't have enough "organic" traffic to satisfy its advertisers or that needs to build awareness and usage (almost everyone). CL is in the enviable position of having an extremely strong brand and huge traffic in its major markets. In other words, it doesn't need Oodle. So it decided to make CL the only place users could access its listings (notwithstanding Housingmaps, which is more about fun than money).

So this is a blow to Oodle but potentially not one that is insurmountable for the site. Travel site/aggregator Orbitz, for example, is widely used but doesn't include Southwest or JetBlue flights. So Oodle could well continue and succeed (ultimately, I believe it will be acquired by the newspapers)/

The larger issue here is openness versus the "walled garden." America Online abandoned the walled garden (and is in the midst of a big ad campaign telling the world). But a stealthy new version of that model and thinking — what I call the "invisible walled garden" — still widely exists at search/portal sites (i.e., comprehensive feature sets intended to keep users within the system). There's also the example of the Yahoo! and MSN IM agreement, but one could argue that was defensive.

There's a philosophical debate and also a power struggle that are text and subtext here. Defining Web 2.0 (now something of a clich©), people argue that it's about openness and interoperability. But the real politic of the Internet is still about who's got the eyeballs and who needs them, who's got the advertisers and who wants them.

The whole MSN-AOL-Google-Comcast courtship dance falls into this category as well.

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More dialogue and debate from the Oodle blog.