Craigslist is an amazing Internet success story. It could also singlehandedly destroy the newspaper industry in this country. And it’s doing it with just 25 employees and eschewing the big profits it could be making.
The latest Business Week has an interview with Jim Buckmaster, the CEO of Craigslist. Here’s the bottom line of the company: It serves 450 cities, gets more than 750,000 job listings per month, 14 million new classifieds per month, and only charges for the tiniest percentage of the services it provides—at the moment nominal fees for job listings in 7 cities and broker’s apartment listings in New York. That’s it. Oh and by the way, the company made $25 million last year and has been profitable since 1999. That’s more than $1 million per employee.
There’s an altruism involved here that doesn’t look at everyone as a potential cash cow to be fleeced of as much money as they will allow.
Meanwhile, it’s driving the newspaper industry batty as it siphons away the most profitable parts of newspaper advertising, namely classified ads, job listings, and real estate listings. (It’s quite funny to watch the local tabloid, the Boston Herald, run hysterical articles every so often about the dangers of Craigslist. A woman sold something on Craigslist and the guy who came to her house robbed her! As if that couldn’t happen with regular classifieds.)
And even though $25 million is nothing to sneeze at, Craigslist is leaving hundreds of millions, even billions, on table. And they don’t care.
When asked why, Buckmaster responds:
This is where the descriptions like ‘communist’ and ‘anarchist’ come in. It seems to make no sense to let a site be as useful as possible and pay no attention to the monetary side. But [generating more revenues] hasn’t been tempting. We enjoy working at Craigslist. Users like it, and we’re not sure what we would do with a big surplus of cash. We’d probably look at ways to give it away.
The Web 2.0 way
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