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Craigslist Eyed for Possible Future IPO

Posted by CowboyNeal on from the drooling-investors dept.

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."

1 of 205 comments (clear)

  1. Do the math and you will understand why founders by Anonymous Coward · · Score: 5, Interesting

    want an ipo. Lets say Craiglist is making 25 million a year in profit and they file for an ipo. So what will the market capitalization of the company? Most likely some where between 250 million (p/e of 10) to 2.5 billion (100 p/e which is about yahoo p/e ratio) depending on how fast people will think your revenue will grow. By ipoing you can get the next 10 years of profits now. There are tons of details (ie founders have limits on how fast they can dump stock) but effectively you can get the next 10 years of profits now and the best part is you don't have to work for the next 10 years.

    Personally I think they will have problems charging for a lot of thier services. The reason people use CL personals is because they are free not because it is a great service. Same thing for a lot of other categories where people are trying to get rid of junk

    BTW It is the VC which prcess really founder equity more thab ip process.