Mark Evans

Craigslist: Anti-Capitalist or Public Service?

I had the chance to sit down with craigslist.org. CEO Jim Buckmaster recently in Toronto. From watching the documentary “24 Hours on craigslist”, I knew it is a different kind of business but I didn't realize it is more of a public service than a money-hungry operation. You do have to admire them for sticking to their beliefs.
By Mark Evans
National Post
There is something unsettling about craigslist.org, one of the world's largest online classified Web sites.
With 7.5 million unique visitors, and five million new classified ads and two billion page views a month, craigslist has all kinds of potential to make money — and lots of it — from listing fees, banner and pop-up ads and sponsored links.
Instead, the San Francisco, Calif.-based company seems oddly ambivalent about this golden opportunity. Rather than charge for a wide variety of services, the company only demands payment for job postings in New York, San Francisco and Los Angeles.
Jim Buckmaster, craigslist's chief executive, said money has never been a driving factor for founder and majority owner Craig Newmark, who launched the site in 1997 as an e-mail list to tell friends about cool events in San Francisco.
“Craig never got into it to make a lot of money, and we have kept the ethos throughout,” Mr. Buckmaster said in a recent interview in Toronto. “Traffic is such that text ads would be lucrative but craigslist is very unusual compared with folks on the Internet. Craig and I do not have expensive taste. We both mostly work all the time so I'm not sure what we would do with all the money.”
Neither is oblivious to dot-com riches. They work close to Silicon Valley, and one of their board members is Pierre Omidyar, who founded eBay Inc. and, in the process, become a multi-billionaire. Still, they have rejected the entreaties of venture capitalists and investment firms who would be happy to help craigslist do an initial public offering.
While craigslist does not disclose its financial results, it has been profitable for the past five years and analysts estimate it had revenue of US$7-million to US$10-million last year.
“People made fun of us during the boom for not doing a VC round or not going public,” Mr. Buckmaster said. “But most of the companies who poked fun at us are gone.”
Perhaps one of the reasons Mr. Buckmaster and Mr. Newmark have little interest in taking advantage of craigslist's popularity is the fear of ruining the community spirit that has made the site so vibrant. You can buy or sell anything on craigslist, whether you are looking for an apartment, a parking spot or a bass player for your band.
Another thing that sets craigslist apart is the lack of bells and whistles. It is a low-frills operation with no fancy logos or graphics. It looks like something that would have been cutting edge a decade ago when the Web was just emerging into the mainstream.
Craigslist's weird, wonderful and eclectic nature was celebrated in 24 Hours on craigslist, a recent documentary that examined the people and stories behind dozens of ads posted on Aug. 4, 2003. This includes a drag queen, who dresses up and sings like Ethel Merman while doing cover versions of Led Zeppelin songs, seeking backup musicians.
If there is anything that surprises Mr. Newmark and Mr. Buckmaster — aside from the fact “Ethel Merman” was able to find band members, is how large craigslist has become. The number of page views is growing 100% a year, and the site ranks among the world's 10 most-visited.
There are 100 craigslist city sites in 20 countries. Its Vancouver site attracts 100,000 visitors a month and eight million page views while the Toronto site pulls in 90,000 visitors a month and six million page views.
As craigslist continues to grow, Mr. Buckmaster said the 18-employee business is cautiously exploring new revenue sources. One possibility may be apartment listings in New York where the free service is so popular, the site is overwhelmed by brokers using automated tools to get their lists to the top of the list. He also suggested the fee-based, job-postings model could be extended to Boston.
How long craigslist can maintain its quasi-public service approach to business and/or resist a takeover offer given its popularity and revenue potential is up for debate. eBay is a potential buyer since it already owns 25% of craigslist after buying a stake from a minority shareholder last year. Another option is an IPO — analysts estimate the company could be worth US$100-million — but craigslist dismisses the idea. “Pierre Omidyar is worth over US$10-billion so we are aware you can make money,” Mr. Buckmaster said. “But money comes from with a lot of baggage so to speak.”