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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."

10 of 205 comments (clear)

  1. Why bother? by RayMarron · · Score: 5, Insightful

    When you're raking in that much cash, why go public and turn over control of your company to shareholders? If you just want cash, sell the whole company.

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    1. Re:Why bother? by jusdisgi · · Score: 5, Insightful

      Yeah, totally. This story is pretty damn thin. This random journalist just 'guesses' that this website might go public and play with the big boys, and we're all supposed to bite? Whatever. These 14 people are running a website and pulling in 25M a year between them, I don't see them going anywhere but Tahiti. That's where I'd be. The people he quotes don't confirm his guesses at all...they basically say, "we've got plenty of money, why would we need VC's or going public?"...this is a stupid artical, and should never have graced /.'s main page.

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  2. RIP Craig by Doc+Ruby · · Score: 5, Insightful

    Craig's List was great because it spread by word of mouth. The community had accurate ads for good values. Also, every user I ever heard of, on either side of any transaction, was encountered almost like a "friend I hadn'y yet met". That kind of transitive trust within the community will be exploited, and destroyed, by the IPO frenzy. If there's even any left now that it's been front page news on Slashdot.

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  3. Re:Is it just my city... by wankledot · · Score: 5, Insightful
    "... ugly ameturish [sic] interface..."

    I believe the words you are looking for are: simple, clean, fast, appropriate interface.

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  4. why go public? by incast · · Score: 5, Insightful

    No seriously... what capital projects could they be planning that they would need an equity offer for? If the company is generating ~$2M/employee right now, I am willing to assume that they are making a fine profit and should be able to present a strong enough balance sheet to either get loans or simply pay for a reasonably-sized project without any debt or equtiy.

    At least with google there's a scale issue as they add more features/services and attempt to attract a larger userbase. Is Craigslist moving toward doing the same?

  5. 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.

  6. Craig Newmark, awesome human being by ortcutt · · Score: 5, Informative

    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.

  7. Comment removed by account_deleted · · Score: 5, Informative

    Comment removed based on user account deletion

  8. Re:Won't work by NivenHuH · · Score: 5, Insightful

    Insightful???

    Craigslist is one of the useful tools that most of the people in the Bay Area use.. Flaming it, and the citizens of SF is hardly insightful..

    *took off karma bonus so i won't be modded down*

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  9. We charge for job postings by bitchin_camaro · · Score: 5, Informative

    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