Ghost of Midnight

Craigslist didn’t kill Newspapers

I just read an interesting article from the U.K. about Craigslist, based on an interview with CEO Jim Buckmaster. On daily newspapers in the United States:

“I think it’s exaggerated to say that Craigslist has had a devastating impact on classifieds revenue,” said Buckmaster. “Newspapers as an industry are still twice as profitable as the average United States industry.”

“Journalism as practiced at newspapers has been hurt by an excess of money over the years as you’ve seen newspapers bought and sold and consolidated into large chains run by corporate managers to maximise profit, and increasingly over decades have resorted to running wire stories, putting an ever-greater proportion of advertising into their newspapers and shying away from writing hard-hitting stories about corruption in high places,” said Buckmaster. “The financial position of newspapers has not declined, it has more plateaued.”

And on dot.com business models:

“Our goal is to maximise utility for users, so we concentrate on doing what users ask us to do and little else. We do want to run a healthy business and we do have a healthy business, but beyond that maximising profits and revenues has never been a primary goal. It’s unfathomable to the financial community and Wall Street, it’s antithetical to their whole world view, it’s sacrilegious.”

It is in the top 10 English language websites by traffic, it serves six billion pages a month to 10 million users, yet it only employs 23 staff. It is those low costs which have kept it in business.

“It was fairly ironic, 100 per cent of dotcoms were geared toward trying to achieve an IPO and make a lot of money and 99 per cent or more of those companies went bust without making a nickel,” said Buckmaster. “Craigslist was never about money, and yet we were one of the very few that came through the bust and have done well year after year.”

Classified-type postings within neighborhood forums continue to grow at Front Porch Forum. I’ve heard from many of our members that when they failed to get a response to classified ads posted in the local paper and craigslist, they’ve turned to Front Porch Forum. They post a note to their neighbors and receive 3-4 responses within 24 hours. Doing business with a neighbor vs. a stranger is a big difference. Would you rather buy a used car for your teenager from some stranger 45-minutes away, or from the neighbor around the corner? Plenty of examples on our Testimonials page and past blog entries.