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How Craigslist is Keeping up Internet Ideals
prostoalex writes "CBS MarketWatch discusses whether Craig Newmark and CraigsList.org are missing out by not 'monetizing' their traffic or selling out to large corporations. CraigsList is currently #7 e-commerce site on the Internet with 13M unique visitors monthly, and only charges for real estate listings by professional brokers. No word on whether that income is enough to pay 24 salaries and data center fees for hosting a major Internet site." From the article: "Their noble stance gives entrepreneurs from San Francisco a great name. Despite the many unfortunate examples of greed, Internet entrepreneurs aren't all about getting rich quick and cashing out. At an entrepreneur's roots is a vision to provide a service that helps alleviate a pain point. The money thing always muddied the waters down the road. The attitude at Craigslist is a nice reminder of how entrepreneurs' ideals can still remain intact, no matter how odd they may seem in a world that worships money."
> "whether Craig Newmark and CraigsList.org are missing out"
Of course they're missing out on making tons of money.
However, whether they're missing out in a sense which matters to them personally, presumably not, since they've obviously chosen to do what they wish to do; so MarketWatch is basically contemplating its own navel.
> No word on whether that income is enough to pay 24 salaries and data center fees for
> hosting a major Internet site.
Apparently it must be, or they wouldn't still have jobs and the sites would have closed down.
Some people paid attention during the dot.com bubble, learned a few things and are happy to just do what they want to do.... I dig that attitude.
Real estate is not the only paid category. Jobs postings in the largest markets are also revenue producers. (Although at $25 it can't be beat)
How does the Slashdot Effect happen given that no slashdotters ever RTFA?
Um, eBay owns 25% of them.
Not quite. eBay bought a chunk of craigslist from one of the original partners -- I don't think CL the corporate entity got anything out of the deail.
How does the Slashdot Effect happen given that no slashdotters ever RTFA?
Craiglist is a wonderful site which is put to use and also sometimes misused by the people using its services. But one is bound to believe that the good it provides far outweighs the bad things. I know atleast one guy who emigrated to USA who has used craiglist to find better accomodation. Having read the story, I feel that the two owners running craiglist are true philanthropists.
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That might possibly be the majority of the traffic (I wouldn't know). However, I've gotten a few very good jobs through Craigslist, and I've spoken with HR people who say they've had better luck with Craigslist than places like Monster.com. I've also found apartments on Craigslist, and I've had friends who've bought furniture and bicycles and all sort of stuff (some of it "free" by just going to pick it up).
I'm sure that, like the internet in general, you can find many disturbing things on Craigslist, but also just like the rest of the internet, you can find many useful things, too.
These guys are "greedy capitalists." They charge for some things. I'm sure they pay their bills and provide homes and nice things for their families. They are just choosing an approach that maximizes the long-term prospects for their company. Many choose to go for short-term gains and suffer in the long run, but both approaches involve something being sold, something being bought, and some sort of filthy currency.
I see these sort of ideas come out of the San Francisco circle jerk of media many times. Capitalism is bad except for OUR capitalists, which are good. In the long run, this approach may make these guys even more greedy over the years compared to all the prospectors who try the hit-and-run approach, and there is nothing wrong with that. In fact, all this economic navel gazing is only possible in rich capitalist countries where we have more time for self-righteousness because we don't have to spend so much time just getting enough food to live.
About a year ago I was working at a big European bookmaker and our MySQL setup had gone as far as we could push it. We wanted to hear from another big MySQL user so our CTO mailed Craigslist, and to our pleasant surprise we soon got a very long, friendly and helpful explanation about their setup. I don't need to say how rare that is in business. Very likable company indeed.
It's interesting to think about the economic implications of Craigslist - certainly, not slapping ads everywhere and charging for all sorts of posts has allowed the site to grow to its huge size, but on the other hand, it has all but killed newspapers' cash cow, the classifieds. You can say, "who cares, newspapers are dying anyway," but the resources newspapers have - trained journalists, editors, the whole damn infrastructure - is quite valuable to our society as a whole. I don't really think Craigslist is going to kill the whole industry, but it's certainly had a big effect on how newspapers will move into the 21st century.
That being said, this decision on Craigslist's part to not monetize the site fully is something like "accelerated capitalism". In other words, they're skipping that whole phase where they maximize their size and influence to make lots of money until a competitor comes in to undercut them - because you pretty much CAN'T undercut them, they're undercutting themselves to achieve scale. Sites like Youtube are doing this too - the technology of everything has grown faster than the market can respond.
While people often make attempts to prevert the internet into what they want it to be, a place to advertise, a place to argue, to publish information about yourself that no one wants to read, it continues to resist shoves in any particular direction. When something new is added the old stuff is not displaced. YouTube can make thousands of videos available and everyone can get really excited about the coming Web 2.0 apocalypse, but all the old stuff is still right where it was and just as useful.
If Craigslist wants to give stuff away, they can. If someone wants to charge for the exact same service, they can. If a guy can convince a VC to give him a couple of hundred million dollars to build a web site that tries to ship 50 lb bags of dog food across the country, and he has a time machine to take him back to the early 90s, he can.
"Sacrifice for the good of The State" - The State
Is it just me, or is it annoying that neither the original news article nor the slashdot summary have a link to Craigs List, the website under discussion?
Granted this one is an easy one to find, but in general, why are News sites so stingy with links to what they are reporting on.
Not providing pictures of some marvelous device they are reporting on is also a major gripe
BTW
Craig's List
Letter To Iran
Personally, I just see Craiglist as a web emulation of Usenet, with a few enhancements like the ability to easily include pictures, edit your posts (cancels haven't worked on Usenet in a long time,) flag offensive posts, a web interface (which makes it easier to use for the non-technically inclined) and management that's all together in one place so things can be changed (for good or bad) a lot quicker and easier than they can on Usenet.
They did a pretty good job with it, and did a really good job with only trying to charge the people who were really willing to pay -- which brought in enough money to pay for things (I assume) but not to alienate their users. If craiglist were to try and require that everybody have accounts and charge for them, most of their users would just leave, and somebody else would probably re-implement craiglist somewhere else.
In any event, Craiglist gives up a lot of the features of Usenet, but for the most part these are features that the users have decided that they don't need -- or at least they seem to have decided that with their feet, because they're using Craiglist rather than Usenet. (Perhaps they're not even aware of Usenet, or their ISP doesn't offer a news server because it thinks if it does, it has to offer alt.binaries.* But that's another matter entirely ...)
You know, I've worked for a small start-up kind of business that was "missing out" on "tons of money". Basically, the owners could have sold it to a much larger company, which then would have run the company into the ground. Or, they could have adopted the same practices that their competitors were using, and made a lot more money over the short term.
However, what kept the company working the way it did, what kept their customers happy, had always been the practices that cost them a bit more or didn't make as much money in the short term. What made it a good company was that it was a small company, without a lot of red tape or bureaucracy. The practices that made the owners, employees, and customers like the company were exactly the practices that a large company or a company driven by short-term profits would not do. In short, they could have sold out at any time, and become not better than their competition for the sake of short-term gains, but chose not to because they wanted to do a good job.
I wish more companies worked like that.
It takes no particular talent to sell a dollar for 50 cents.
If what they've done is so easy, why doesn't someone else just create a different but similarly-oriented site, monetize it, and laugh all the way to the bank?
They're providing a service that people want, and are apparently making ends meet while they do it. That's hardly "selling a dollar for 50 cents." Many sites can't even manage to do that.
What MarketWatch is arguing, is that perhaps they could make even more money than they're doing. Perhaps they could. But perhaps they'd also drive away some of their audience and leave themselves open to the 'next' Craigslist.
Just because they're not making risky business decisions doesn't make them fools; I thought anyone who'd survived the dot-com burst would realize that maybe a conservative stance is underrated when it comes to building a brand and business.
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Forbes occasionally whines about Craigslist. The real effect of Craigslist is not on the Internet. It's killing newspaper classified advertising, which used to be highly profitable.
Nothing is wrong with greed. But, conversely, what's wrong with a little socialism?
The attitude that emenates from CL staffers (and is reflected in their users) is: There are lots of places to get your greed on, let's have one that is more happy-hippy just-a-bunch-o-friends swap-n-shop shoot-the-shit kinda place.
THAT, in my arrogant opinion, is why Craigslist has been so phenomenally successful. It is a pleasing balance between capitalism and social community
How does the Slashdot Effect happen given that no slashdotters ever RTFA?
It and livejournal with its communities are basically USENET for the 21st century. Not that USENET is dead, BTW, but they're a more user-friendly replacement.
-b.
Obviously the question arrises as to whether that's just the natural course of evolution and it's time for the dinosoaurs for find a new bussiness model. That's too glib a response for two reasons. First, it's a matter of huge consequence to the nation and to democracy in general to have a plethora of news sources that get their profits from the masses directly so they are not beholden to a few key advertisers. Second, craig's list is a temprary anamoly. It might be said to be a loss leader for whatever is going to replace it. But someday it's going to die or get forced out of bussiness. For example, as has been widely predicted when net neutrality goes away people running big sites are going to have to start paying the ISPs for access to their customers. Or maybe Craig's list will go public or it's owners finally decide to cash in on the latent ten billion dollar value they have.
In any case we won't have free classified ads forever. But in the mean time we might loose all the newspapers.
I'm not happy with that trade. Free does not always mean the results are good. It's like someone was giving you free internet explorers for a while and you nearly lost netscape.
Some drink at the fountain of knowledge. Others just gargle.
I know slashdot's readership has a decidedly socalist leaning about many things, but what is wrong with people deciding to profit from what they have created? Why is foregoing said profit considered "noble"?
Nothing. It's not really profit that's the issue, it's mass-commercialization and expanding a site beyond the original scope, and the drive not to just make some money, but to make as much money as you possibly can.
Those goals often times are in direct opposition to providing a usefull service to the community. There's nothing noble about not making money, or anything wrong with making money. There is something noble about putting your goals of service above the goals of profit. It doesn't mean that Craigslist can't make a profit, it just means you don't throw everything else away for a drive to make more and more money.
AccountKiller
From the article:
"Their noble stance gives entrepreneurs from San Francisco a great name. Despite the many unfortunate examples of greed, Internet entrepreneurs aren't all about getting rich quick and cashing out.
Slashdot, on the other hand, sold out to OSDN, and has never been the same since. They could've done worse than OSDN as corporate overlords, but still, there are a lot of ex-dotters out there who miss the early days.
If this were Usenet, I'd killfile the lot of you.
I just finished re-reading "The Door Into Summer" by Robert Heinlein and i'm reminded of the part where the main character's business partners are trying to force him out of so they can sell the company to a big corporation. He says something along the lines of "You can't use more than one swimming pool or more than one yacht at a time, and you'll have both in another year with the way we're doing business now so why should we sell out to another company and put them in charge?" But his partners are intent on having more money and power than they can actually use, just for the sake of money and power.
It seems like all the old desires to build empires out of countries has changed with the times and been applied to the business world. I wonder if society as a whole will ever look back at the present and think "why did they ever waste so much time and happiness in pursuit of something like that?"
This Space Intentionally Left Blank
Money is important. You need it to buy food, shelter, medicine, providence for your family (if you have one) and so on.
The economy moves rapidly. It is not always obvious where your money will be coming from ten years down the road (when your skill set has been made obsolete or your industry has been outsourced or what-have-you). Having a fat pile of money ensures that your needs will still be met.
So I don't know that it is fair to say that our society "worships" money. The fact is we need it, so we put a lot of effort into getting it. That's just the way it is.
So, while the business of making a lot of money quickly may seem greedy, we must admit that there are very compelling economic (and even personal) motivations for attempting to do this. The sooner you have a large nestegg, the sooner you can rest easy in the face of an unpredictable future.
Resisting this urge, and instead accepting a slower income (and along with it the risk of running out of money in the future), for the benefit of others, is noble. Does that make a failure to do this evil? Are there two polar extremes with no middle ground?
IMO, providing for your needs, now and in the future, is not greed so much as self-interest. This is the primary motivator behind a capatilist society, which is the one in which we live. I won't deny the nobility of self-sacrifice, nor will I deny that there is a point at which accumulation stops being self-interest and transforms into greed. However, I will also deny that self-interest is the same as "worshipping money" or that trying to make money quickly is greedy or evil.
They realized that filthy rich was ok and that they didn't need to go for filthy, filthy, filthy stinking rich?
Nerd rage is the funniest rage.
I think it's worth mentioning as well that Craig et. al. make mountains of money. Just not as much as they could if they exploited their product to the hilt. Part of why they got where they are is by not doing those things.
Platform advocacy is like choosing a favorite severely developmentally disabled child.
Sorry, but more money in the hands of good people is a good thing. Think about Buffet and Gates. Those guys are putting together a charity which may have the ability to literally wipe contagious disease from the face of the planet*. If they had followed the business philosophy of Craig, well, there would be a whole lot more dead kids out there.
It's like my friend in dental school. She says she doesn't want to make a lot of money, she wants to help people. So when she graduates, she's going to spend a year in south America building houses for poor people. I told her that if she really wanted to help, she would work in the US and use half her salary to hire a dozen workers in her place to work in her place and build many more houses than she could ever build.
*imagine vaccinating everyone on the planet for all diseases which require human hosts at the same time. Craig would be a better man if he capitalized and chipped in to that fund.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.