I am planning to start a website where users generate and share
content.  The intent is for the content to provide information to
users that contributors feel is valuable, similar to how del.icio.us
users learn about websites other users thought were interesting enough
to bookmark, or contributors to Wikipedia share information on topics
they know about.  Users will have the ability to network with each
other, but the networks will be fragmented by location in a way
similar to Craig's List, because of the content will be local in
nature.  I plan to earn revenue through advertising once a larger user
base is generated.

I am considering using an open source content management system as a
platform upon which to build this site.  I need recommendations on
systems that will meet my needs, and please tell me why you think your
recommendation is a good bet.

The easiest way to imitate the content distrobution of Wikipedia is to
use... a Wiki! :)

Wikis are a good way to organize content like you're suggesting, and
the nice thing is that you can set them up for free with pre-written
scripts etc. If you'd rather not even bother setting it up for
yourself, there are even sites which serve them for you.

I would recommend the guide at
http://en.wikibooks.org/wiki/Wiki_Science:How_to_start_a_Wiki as a
starting point for your quest. After you have it set up, you'll want
to protect certain pages from editing (like your main page) and set up
a user registration system.