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WSJ on CraigsList and Zen of Classified Ads

Posted by ryuzaki0 on from the less-is-more dept.

prostoalex writes "Wall Street Journal profiles one of the Valley's most mysterious and secretive Web companies. A leader in online classifieds space and by some measures one of Web's top sites, CraigsList is ostensibly anti-ad and anti-self-promotion. From the article: "One industry analyst has estimated that Craigslist could generate 20 times that $25 million just by posting a couple of ads on each of its pages. If the estimate is to be believed, that's half a billion dollars a year being left on the table. What kind of company turns up its nose at $500 million?""

3 of 278 comments (clear)

  1. Points from TFA by Odonian · · Score: 5, Informative
    So to paraphrase Jim Buckmaster (Craigslist CEO): The company has 21 employees and has been profitable since 1999. They have no venture capitalists or stock holders so they are beholden to no one. Their policy is to only implement things users want. Users don't want banner ads. They aren't above charging commerical interests who use the site for profit, such as real estate brokers.

    And that's pretty much it. The guy is happy and making enough money as-is, apparently.

  2. Re:Hey! We were gonna milk that for all its worth! by fm6 · · Score: 5, Informative
    What kind of company turns up its nose at $500 million?

    The kind of company that companies which wouldn't turn up their noses at $500 million doesn't want you to believe exists.

    And in fact they pretty much don't exist. Craigslist was founded by one guy, Craig Newmark, entirely with his own money. He still owns most of the company, except for one small chunk that he gave away, and that later was sold to eBay.

    Craigslist is the exception that proves the rule. Consider the following facts:

    • Craigslist has no investors or debtors to satisfy.
    • Craigslist has lucked into a large and loyal customer base built entirely on word-of-mouth..
    • Craigslist costs very little to keep running.
    • Craigslist has goals set entirely by one individual who has no desire to make more money than he needs to live off of.
    If any of these factors didn't apply, Craigslist would be just another company that would be utterly incapable of turning its back on that half-gigabuck. And yet each of these factors is extremely rare.

    I actually find Craigslist's money policies a little short-sighted. Not that I'm entirely against them providing free ads. It's nice that you can post your resume, or sell your couch, or ask somebody to come and fix your computer, and you don't have to pay. A lot of the people who use these services couldn't afford to use them if they weren't free.

    But why should all the people dealing in real estate get a free ride? I don't mean people who just want to split their rent with a roommie. I'm talking wealthly landlords and folks selling million-dollar homes. Who benefit not just from the fact that Craigslist is free, but the fact that the housing search software is well-designed. They should pay. If Mister Newmark doesn't want the money, there are plenty of worthy causes.

  3. Re:...Costco? by sadr · · Score: 5, Informative

    CostCo pays their employees very well for retail and treats their suppliers with respect. In return, their suppliers try hard to keep them as a customer, and CostCo's "shrinkage" (i.e. mostly employee theft) is the lowest in the industry.

    Their profits are essentially the annual membership fee. Once you've paid that, you're buying everything pretty much at cost (including those higher salaries.)

    They do not advertise and dispense with most of the corporate BS. Which means the customer doesn't have to pay for all of that overhead either.