Toronto

$1 billion / 1 br - AMAZING STARTUP, SLIGHT HISTORY OF SPAM PROBLEM

June 7, 2011: 1:02 PM ET

Airbnb embraced a different, questionable kind of advertising to help get off the ground. It'd be surprising if it wasn't so necessary.

FORTUNE -- Dave Gooden says he didn't intend to be a whistle blower. But last week that's what he became, forcing Airbnb -- the next Groupon, Zynga, and/or Twitter, if you believe the hype -- to investigate its own advertising practices and compelling the media to hound him until he decided to stop talking. Two days after stirring the pot, Gooden was already saying "I am not interested in getting any more attention over this matter," and returning to his less noticeable life as the founder of a small real estate website in Minnesota.

The fuss started when Gooden read the news that Airbnb, a website that helps tens of thousands of people make money by welcoming strangers into their homes, was rumored to be worth a billion dollars. Gooden, a humble guy in Minnesota who tried to build a competitor to Airbnb in 2009, was not the founder of a company worth a billion dollars. He was the founder of a facsimile that for all intents and purposes no longer exists.

And so Gooden went digging through his inbox. In 2009, while he was building that Airbnb competitor, Mimbeo.com, he couldn't understand how Airbnb was seeding its site with so many listings. Building an initial community is the hardest task for a listings site in its youth -- indeed, for any site that purports to be "social" in any way. Airbnb now claims it found its first customers through PR, partnerships, and word of mouth. In 2009, Gooden had a different hypothesis: that Airbnb was trolling Craigslist for potential renters, convincing them to also put their listings on Airbnb. To test it out, he put up some dummy room-for-rent listings on Craigslist, testing to see whether he'd be solicited. He was, but not by Airbnb. By an affiliate on its behalf: More

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