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Craigslist Eyed for Possible Future IPO
An anonymous reader writes "Eric Hellweg wonders if everyone's favorite want-ad site will join the ranks of eBay, Amazon, Yahoo, and, yes, Google. Hellweg guesses it makes $25 million a year by charging for only 12 percent of its ads. If it ramped up payments on more ads throughout its many-city network, it could hit $100 million. That's a monster margin for a 14-person staff! And they may even consider going public."
Craig Newmark is an awesome human being. Check out his blog. He's not only an open-source software user (SuSE on a Thinkpad T40) and the creator of the largest and most useful (and OSS-based) community bulletin board in the world, but also a progressive Democrat and all-around humanitarian.
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The article is a speculation about what might or would happen if Craigslist did go public. The Craislist CEO points out that, "We have no plans to go public." So, I'll be really disappointed if people post things claiming the Craigslist is selling out, because that would mean that you didn't RTFA.
Craig was talking about the possibility 5 years ago, shortly before the market went bust. If there was serious money to be made, I don't think he would hesitate.
Not to mention that there is a lot of competition on the internet.
http://www.traderat.com
http://www.mjmls.com
I personally like tradeRat.com, because it allows me to list my garage sales and sell within my neighborhood, saving me shipping $$$.
We charge employers $75 to post a job ad in San Francisco, and $25 in LA and NYC. In fact, we only started charging for NYC and LA this past week. Every day, there are hundreds of job ads just in San Francisco. It's a (very) decent chunk of change. Sean @ CL
There are lots of reasons.
By selling, people will pay you for what they percieve as the value of future profits (and maybe some growth potential). You don't have to wait around for it to happen, or work your ass off to make it happen.
Alternatively, if you don't want to sell entirely, but have a company that can turn X dollars into X*Y dollars. Investment in the company will allow you to increase X (and so presumably increasing X*Y).
If you have more than one member in your company, and IPO creates a market for those shares allowing the members to leave when they want.
Finally, the goal (more or less) of a business is to make money. Neither profiting nor trading are excluded from the means except if you state it in the company charter.
You're right, the level of spam across all the boards has been increasing. On newer cities it's much more prevalent since there are fewer people actually using the board (and in turn flagging off bad posts). We're hiring more customer service people soon, but in the meantime, shoot an email with some URLs to abuse@craigslist.org
cheers,
Sean @ CL
Basically, we work to get established in a particular region and after we hit a critical mass (posts in general, users, spam), we introduce paid job postings. There's the obvious profit for us, but also just as important is that this cuts down a lot of irreputable job posts, increasing the overall quality of that category. Like in SFO, there's a big drop of postings right after the charging starts, but it picks back up with in a couple months (and ends up significantly stronger).
Twenty-five million is on the low side of sales to take a company public. It probably costs $50-100K per year extra to run a public company, get big-8 audits, set up an investor services desk, file SEC crap, live in a fishbowl, pay liability insurance for the board, etc, etc. At this size one would look to VC's.