Airbnb won because:
- Better design, easy to use, nice pictures they took themselves at first (per PG's advice)
- Integrated payments and reviews in a seamless experience
- Popularized the idea of sharing a space when the host is there
- Offered unique accommodations in urban places
- Lots of buzz about treehouses, castles, teepees, shipping containers, etc.
- Their timing benefited from the Great Recession
- Very good at promoting their rag to riches story with YC's help
- Also you didn't need to constantly repost like Craigslist, just post once