Your response answers your question about Rap Genius.
It's so valuable because they figured out how to gain traction and build a large community, it's not a lot more complicated than that. Now they're going to attempt to leverage that into everything else that can be annotated. Combining all of that in one location = worth a few billion dollars potentially, at least in this inflated market.
They built a slightly better mouse trap, or at a minimum got the mice to come to their mouse trap instead of other mouse traps (most lyrics sites are terrible).
For most consumer sites, the technology is far easier than acquiring the users and a community that meets a certain quality standard. These days the technology part is really easy in fact.
People are telling you why your question is flawed from its premise without actually coming out and saying it. Try reading between the lines a little bit.
Don't lots of websites have links and comments? It's not about the capabilities (which are a little more nuanced than "hover over text and see explanations") it's about the quality and community which creates the content.
To be a little more helpful, they've partnered with Lloyd's of London to provide a nice insurance policy for all renters: https://www.airbnb.com/guarantee
But since this person is in violation of AirBnB's terms of service, he might have problems collecting on their insurance policy. Their TOS states[1]:
... you will not:
...offer, as a Host, any Accommodations that
you do not yourself own or have permission to
rent as a residential or other property...
Clearly he does not own the property or have his landlord's permission to rent it.
This is one of the things about AirBnB that bothers me. They know it's not legal for him to rent it because of NYC's Illegal Hotels Act. I can't shake the persistent feeling that they know their business model relies on people breaking the law and they just don't care. That bugs me.
I poured myself a glass of wine and sat back to read these comments. This is exactly what I wanted to say myself. Facilitating breaking the law and the social compact of residential neighborhoods, that is their business model. It is because of this argument that I will be happy the day I see AirBnB go down in flames, though to be honest, I doubt I'll have that pleasure.
Edited to add: I would change "don't care" to "have consciously decided that limiting their business to places where it is legal, while feasible, would limit their profits and their relevancy in ways they do not want to do."
The buzz from the wine is wearing off, and I remembered that I do think the AirBnB model (but not modus operandi) has 2 legitimate purposes: 1) occasional subletting during occupant absence and 2) satisfying temporary demand.
Case 1) is essentially making vacation home exchange totally fungible. By definition (at least for most people), a vacation is infrequent and has significant cost, in part due to paying for 2 dwellings concurrently (the vacant home, and the vacation accommodation). AirBnB solves this by having a large market of people who may want to pay you for your empty home.
Examples of case 2) would be huge conventions and university graduations. These are cases where it would be inefficient to build hotels to satisfy peak demand, and sometimes it becomes impossible to find (conventional) lodging at any price. AirBnB solves this by providing elasticity in the form of non-conventional lodging only available during the peak.
In both cases, the difference with the current situation is that these cases are limited in time. I think AirBnB would be a good thing if it limited the rental of any property to a maximum of 1 month per year, with a limit of 4 guests per year. That would eliminate people running residential businesses, which is my main objection (and probably the company's whole profit and growth strategy). In other words, AirBnB would be a great but small niche player.
Since I'm just talking to myself here, I'll continue with another thought.
If I were in or interested in city government, here's what I would do: pass a city ordinance that A) limits residential short-term leasing (<30 days) to a maximum of 4 events with a maximum of 28 cumulative days (allows for vacations and special events, as detailed in my post above); and B) requires any company offering or brokering or representing such properties (such as AirBnB, VRBO, etc.) to enforce A) and report actual usage to the city for tax purposes.
To me, this is a sensible compromise to regulate the residential homestays enabled by the AirBnB model, to get the benefits of this model and limit the impacts on neighbors and the rental/real estate market. It will also eliminate the unfair "first-mover" advantage that AirBnB encourages (if you are the first in your neighborhood to buy or develop a one- multi-unit mini-hotal, you can fly under the radar and make a small fortune, essentially get a free property). Depending on the local conditions, the city could consider a vacation rental license that allows year-round short term rental--in which case the property can be listed on websites as long as it is described as such and the license must be listed in the ad. Occupancy and taxes must be reported to the city/local government as in the first case.
You might be talking to yourself, but I am reading. =) And I largely agree with everything you're saying. It's utterly incompatible with the growth-obsessive sort of business plan that AirBNB must follow, but it'd be a better thing for human beings.
This is completely off-topic, but you don't have a bold weight of the body font you're using, so the browser is trying to fake it and it looks very fuzzy.
"solves problems" encompasses a vast space of decision making, some of which is arbitrary and stylistic. "That's it" is oversimplifying things.
"In Holland, we have two words for design. One is vormgeving; in German formgeben. And the other word is ontwerpen; in German entwurf. In the Anglo-Saxon language there's only one word for design, which is design. That is something you should work out. Vormgeving is more to make things look nice. So for instance, packaging for a perfume or for chocolate in order to make things fashionable, obsolete and therefore bad for society because we don't really need it. While ontwerpe means, and the Anglo-saxon word, but its stronger, means engineering. That means you as a person try to invent a new thing—which is intelligent, which is clever, and which will have a long-life. And that's called stylistic durability. It means you can use it for a long time."
- Gert Dumbar
By placing advertisements on their site, Rap Genius could generate significant revenue, with Web traffic that would make almost any content-driven site green with envy. Lots of other avenues are open for turning the site into a business. A premium version of the site is one possibility. Creating sponsored pages, where musicians or labels generate activity around new album releases and other content. There have been discussions with an agent to pitch network Comedy Central the idea of a Rap Genius television show, which could be similar to Mystery Science Theater 3000.
So no monetization strategy has (had?) actually been deployed yet.
