Craigslist: The newest variety of classified ads

If you havenít used Craigslist.org, youíve missed a great opportunity to see the future, or at least a significant part of it. In fact, itís more the present than the future, because Craigslist is generating a reported 1 billion ñ billion with a ìbî ñ page-views per month. If you have used it, you probably understand what the fuss is about.

Craigslist is a San Francisco phenomenon thatís grown like Google ñ through word of mouth, because itís a better mousetrap, because itís viral, and with almost no advertising or promotion. Craig Newmark started it as an e-mail list among friends who wanted to make weekend plans. ìWhereís everyone going Saturday night?î quickly added ìI need an apartment,î ìIím selling a bicycle,î ìI want to find a date,î ìI saw you and thought you were really hot,î ìWho knows a good plumber?î and so forth.
Now Craigslist has virtual sites in 45 cities from Albuquerque and Auckland to Tokyo and Washington D.C. It employs just 14 people ñ ìwe could use one or two more,î Craig told me ñ and itís highly profitable. Even though almost everything on it is free.

What does Craig charge for? One thing only ñ job postings. And those are free everywhere except in San Francisco, Los Angeles and New York. The job listings sell for about one-quarter to one-tenth of the going rate. While Monster.com and CareerBuilder.com are somewhere north of $300 for a single posting, Craig gets $75 in the Bay area, just $25 (slowly going up to $75) in New York and L.A.

What will he charge for next? Short-term, nothing. Long-term, possibly ìfor rentî listings. But others, like homes for sale, cars and trucks, garage sales, parking / storage, electronics, collectibles, and many more, will remain free, he says. Why charge if you donít need the money? Thatís Craigís philosophy.

Heís been offered tens of millions of dollars for the company, even though he admits it has a ìbizarre model,î but has turned down the offers. He says he just wants to want to keep his site growing, at least for now.
I finally met Craig a few weeks back. Heís quiet and self-effacing, a really nice guy. Plays the role of nerd ñ ìI prefer ënerdí to ëgeekíî ñ to the hilt. Seemingly, heís still not focused on a real business model for his community that has scared the hell out of every newspaper in the world thatís paying attention. But the graphs he shows about his siteís growth belie (at least to a degree) the aw-shucks-we-just-want-to-improve-the-world posture. He knows how many page-views the Craigslist markets have each month, and he measures success through service, speed and response time. He ìdemotedî himself a while back, and now is ìfounder, chairman and customer service repî of the for-profit company. Jim Buckmaster is CEO.

Craigís vision of the future for the site?

ìWeíd like to place a Craigslist everywhere on the planetary surface where people want one, where weíre welcome. We have to maintain a high level of customer service, and the site has to stay fast,î he told me. He talks that way. And means it. Very, very soft-spoken; sounds like the Web legend heís become.

ìDo you understand,î I asked, ìthat newspapers feel terribly threatened by you?î

ìI know theyíre worried about us; I wouldnít say threatened. If theyíre worried about us, theyíre worried about the wrong thing. They need to be worried about the loss of circulation, the loss of ad revenuesî ñ never realizing, it seems, that he and Craigslist represent perfectly both of those threats to newspapers. ìThey need to worry about blogs, about their political coverage, about asking the hard questions.î And he expresses admiration for Helen Thomas, the long-time United Press International White House reporter, now a columnist for Hearst Newspapers, who charged recently that reporters have gone soft and no longer ask tough, challenging questions.

He wonít discuss whoís offered to buy Craigslist, or for how much. ìWeíve turned that down. The valuations weíve heard are surreal. This is, in a way itís a distraction. In a way itís pleasant. But irrelevant. Ö

ìWeíre just doing our own thing and perhaps blissfully unaware of the real world. The fact is, we have a bizarre model.î

Craig said the company will keep adding cities. ìNow and then Jim gets in the mood to add one. We may go into smaller cities ñ Boise, Anchorage.î

He said the site hit 998 million page-views in July, and was crossing the billion page-views-per-month threshold in August.

Craig worked at both IBM and Charles Schwab, and at 51 heís ìa card-carrying member of the AARP.î

Heís ìnot ëpoor,í but Iím not rich either,î and heís not likely to have to look for a job any time soon. When heís asked about using the Web for that, he replies, ìPeople have different styles, but if I were looking for a job Iíd probably look at my site. But Iíd probably be looking at Monster.com, too. Youíve got to use whatís available.î No mention ñ not surprisingly ñ of his local newspaper.


Peter M. Zollman is founding principal of Classified Intelligence, L.L.C. and the Advanced Interactive Media Group, L.L.C., consulting groups that work with media companies to help develop successful interactive media services. The column above was excerpted from Classified Intelligence Report. Zollman can be reached at pzollman@aimgroup.com, (407) 788-2780.