9.15 Craigslist.Org

Craigslist is a network of online communities that offer online classified advertisements. Sections are devoted to jobs, housing, personals, for sale, services, community, gigs, résumés, and discussion forums.

The service was founded by Craig Newmark in 1995 as an email update for friends on local events in the San Francisco Bay Area. A year later it became a web-based service, and started covering other classified categories. In August 2004, eBay bought a 25% stake in the company from an original partner. Expansion to other US cities began in 2000, and today the classified listings serve most countries in the world. Spanish, French, Italian, German, and Portuguese language support was added in March 2008. {21} Maps from OpenStreetMap (rather than Google) were added in 2012. {24}

Illegal and inappropriate postings are identified by a customer flagging system, and the Flag Help Forum is an unmoderated volunteer community, not affiliated to, and not staffed by, the company. The site has always posted help connections for lesbians and gay men, but its advertisements for erotic and adult services have been gradually phased out.

The site is immensely popular. Alexa figures for August 1st 2011 were: Alexa traffic rank 34, rank in USA 10th (behind Tencent and Twitter respectively), sites linking in: 10,622. Over 80 million new classified advertisements (over 20 billion pages) are viewed each month. {21}

Craigslist is a private company, but, as far as can be ascertained, has some 30 employees in the USA, three main owners (Craig Newmark, eBay and original partners), and pulls in some US$ 100-300 million annually. {20} {25}

Business Model

The model is an extremely simple one. Craigslist charges for ads in selected cities: $75 per ad for paid jobs the San Francisco Bay Area; $25 per ad for paid jobs in New York City, Los Angeles, San Diego, Boston, Seattle, Washington DC, Chicago, Philadelphia, Orange County (California) and Portland, Oregon, and $10 per ad for apartment listings in New York City. Similar ads in other areas, and ads in other categories, are free. No charge is made for a successful sale or contact.

SWOT Analysis

Strengths

1. A well-known and trusted brand.
2. Large revenues from a simple business model that clearly works.
3. Small, tightly-integrated company.

Weaknesses

1. Not compatible with modern platforms (smart phones, iPads and other tablets.)
2. Usefulness declining with increasing spam.
3. Site is now cluttered and not easy to navigate.
4. Help forum is idiosyncratic and unhelpful.

Opportunities

1. Craigslist could more effectively monetize their services, probably increasing revenue by an order of magnitude.

Threats

1. Craigslist could be made liable for content. {15}
2. Google's many competitively-priced services (e.g. Google Base).
3. Integrated Apple services (iPod, iPhone, iPad, and their applications).
4. Look-alikes that improve on Craigslist's current weaknesses.

Points to Note

1. A simple business model that has seen no need to evolve.
2. Successful models can be simple.
3. Craig Newmark apparently wants to remain in control, i.e. still 'own the company', rather than the 'company own him'. {17}
4. A 90s look to web pages: plainness equates with honesty.

Questions

1. What is Craigslist, and why has it been successful?
2. Apply a SWOT analysis to Craigslist.
3. Do Craigslist sites need a facelift? What would you suggest?

Sources and Further Reading

1. EBay Buys Stake in Craigslist by Nick Wingfield. Craigslist. From WSJ of August 13, 2004.
2. Why is Craigslist so successful? WebMasterWorld. June 2005.
3. Wanted: Some hope for newspapers by Adam Lashinsky. CNN Money. December 2005.
4. The Architecture and Ambition of Craigslist by Richard Skrenta on Craiglist's Business Model. Topix. February 2006.
5. Craiglist is Worth More than eBay by Naval Ravikant. Startup Boy. February 2006.
6. Newspaper Killer by Louis Hau. Forbes. November 2006.
7. A Craigslist Case Study by Nisan Gabbay. Startup Review. July 2006
8. Craigslist Flummoxes Financial Analysts by Mitch Wagner. Information Week. December 2006.
9. Craigslist meets the Capitalists. NYT Dealbook. December 2006.
10. The management philosophy of Jim Buckmaster, CEO of Craigslist.org by Lucy Kellaway. Craigslist. From Financial Times of 17 September 2007.
11. A Craigslist Case Study by Michael Rappa, DigitalEnterprise. 2008.
12. The score: Craigslist 7, traditional media 2 by Alan Majer. Wikinomics. December 2008.
13. EBay Files a Stockholder Lawsuit Against Craigslist by Brad Stone. NYT. April 2008.
14. Why Craigslist Is Such a Mess by Gary Wolf. Wired. August 2009.
15. Will Craigslist have to Crack Down? by Olga Kharif. Businessweek. May 2009.
16. Pew Center illustrates how Craigslist is killing newspapers by Greg Sandoval. CNET. May 2009.
17. Craigslist's Business Model. DennisDemori. March 2010.
18. The Future of Online Classifieds: 5 Ways to Beat Craigslist by Reg DesRosiers. Mashable. March 2011.
20. Craigslist disrupted? It's still way ahead of its time. The Plato Report. April 2011.
21. Craigslist. Wikipedia. Basic information and a good list of references.
22. Ebay and Craigslist trade trial blows by David Gelles. FT. December 2009.
23. Craigslist. USA site.
24. Craigslist Quietly Begins Testing Maps by Carl Franzen. IdeaLab. August 2012.
25. Why the Web Hasn't Birthed a Prettier Craigslist by Dani Fankhause. Mashable. February 2013.