The New York Times on Craigslist

What eBay Could Learn From Craigslist – New York Times:

…triple-digit annual growth rates are rare among major Web sites. Meet that rarity: Craigslist.

Exceptional, too, is the ability to draw 10 million unique visitors each month without ever relying on venture capital and equity markets. Or the ability to attain fourth place among general-interest portals without ever spending a penny on marketing.

Signal accomplishments, to be sure, fit for boasting in an annual report. But Craigslist is a privately held company that has no such reports, and no burning interest in the competitive fray. It does far more shrugging than boasting. Its management regards profits, which it has earned consistently since 1999, as merely the means to remain in control of its own destiny. Free of debt, it can do as it wishes to maximize what it calls its service mission without having to maximize profits. This is good news for its customers – that is, community members – and bad news for competitors whose shareholders are unlikely to regard community service as their own companies’ raison d’être.

…Craigslist initially provided online listings of local events in the San Francisco Bay Area, the kind that could be found in an alternative newspaper. Visitors were encouraged to contribute, and they added the online equivalent of the mainstream newspaper’s classified section. Software handled e-mail forwarding.

Unlike eBay, which is dedicated to removing geographic obstacles to trading and defines “community” along national boundaries, Craigslist thinks and acts locally, organizing listings city by city for merchandise, jobs, real estate, personals, events, volunteer opportunities and discussion forums.

..Late last month, Knight Ridder Digital announced its plan to finesse the challenge of free classifieds: it dropped fees for ads for merchandise posted on the Web sites of 22 of its newspapers.

..Data collected by Nielsen/NetRatings show that eBay’s page views in April 2005 grew by less than half a percentage point, compared with the previous April. At Craigslist, page views grew 130 percent in the same period. According to the company’s data, its traffic is now about a fifth of eBay’s. And the operational efficiencies are astounding: Craigslist has 18 employees; eBay has 8,800.

…EBay uses an elaborate feedback apparatus to allow strangers who will never meet in person to feel safe doing business with one another. Craigslist does not need that apparatus. It is for locals only, and it is the one place that can fix you up with an entire life – job, shelter, furnishings, lover – at one stop, with minimal intermediation.

2 thoughts on “The New York Times on Craigslist

  1. I read the extract and so far, I am surprised at the theoretical comparisions.
    E-bay and CL have a completely different revenue model. E-bay is about selling. 10% of its users are sellers, and they produce the revenue.
    CL is about attracting enough eyeballs for employers to pay for job listings, that too, in major cities.
    CL can afford to be a lot more local than E-Bay, and have a leaner staff because it actually uses the old guitar and the IKEA lamp to make money. It has to get serious! Much like how Match.com is more structured, less local and more expensively run though CL ads run for free.

  2. Sorry BB I have to agree with Karl. CL is NOT about attracting enough eyeballs for employers to pay for job listings. It never was. Charging money for job listings is just a way to pay for CL to stay open. In 5 years all the big newspapers will have free classifieds. Backpage is already free. I have an online phamcy review site. All the information on my site is FREE. Some other Online pharmacy sites charge people a recurring monthly fee $20 to $60 a month. I belive information on the internet should be free 🙂
    Bobby

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