From a technology point of view, I love the concept of Edgio, and I love the execution of the new service! Feeding and aggregating content directly from the edge is the future of the web. I really do wish Michael and his team all the best! They have done an excellent job so far.
However, let me outline 5 reasons why Edgio will likely fail to gain traction:
1) National vs. Local:
Edgeio is primarily focused on classifieds and classifieds are inherently local by nature. However, Edgeio does not start out by city. Yes, they have a very nice geo filter that I like but I think that misses the point. Craigslist had a beachhead. They started in San Francisco and then expanded from the major metros. That is where they gained share of mind. When will people ever think of Edgeio?
2)The value of increasing returns
Whenever you have a marketplace there are benefits from having all buyers and sellers list and buy their items from the same place. This is why you only see one leading auction marketplace in the US (eBay) and why you only see one leading local marketplace per city in the US (craigslist). It is too late. Edgeio is not going to change that.
3) Seller pain-points
As a professional seller, you care about building a reputation and selling lots of items. That is where eBay's strenght comes in. It is a great marketplace for sellers and while people will bitch about the costs of listings, etc. it is still one of the most affordable and effective places to sell. So, these sellers don't have the time to invest in Edgeio and they will not see the returns / volume to make it worth their time.
If you are a casual seller and have a one off item to sell, you care about only one thing. You want things to be quick and easy! Well, on craigslist you can list just about anything within minutes.
On Edgeio? Gee, I have no idea but first I have to become a blogger, and second I have to figure out how to create a listing for Edgeio. Lets see, on craigslist I don't even have to register, it is free to use, takes little time and my items might sell in less than an hour (many of mine have).
4) Buyer pain points
If you are a buyer of expensive or hard to find items, you care about a reputation, guarantees, and lots of additional services. You find that either on specialized marketplaces like eBay or on the individual websites of small businesses. However, you don't find this on a blog (at least not today).
If you are a buyer that is looking for local products or services you want to be able to find things quickly. Well, on craigslist you can but on Edgeio everything starts out with one search box. That works for Google and for eBay but not for items that you want to find in your region. Many sites have missed this and Edgeio did too.
5) Jobs are up for grabs but not on Edgeio
The one category that is really going to be disrupted with RSS and edge content is jobs. Any company can start to post their jobs on a site and have it indexed by leading search engines such as SimplyHired. However, here again, blogs and Edgio are not the answer. I would predict that a category killer like SimplyHired will be hugely disruptive to the Monsters of the world.
So, is Edgeio dead?
No, not yet but they will have a very hard time and struggle. Perhaps they will find a niche that is not served well today by either eBay or craigslist. I definitely hope they do. Or perhaps I am wrong but I think it will be a very long time before people start to post items for sale on their blog. If they do, then Edgeio will be the company to reap the benefits.