First of all, Craigslist is defined as an online community with many entities. It is composed of internship, housing, erotic services, personals, services, community, gags, pets, for sale/barter/wanted, resumes, jobs and various other forum categories. Originally, however, Craigslist served the San Francisco Bay area with the sole purpose of posting notices of social interests for software and Internet developers. Eventually, as the word of mouth spread, Craigslist became what it is today- a multi-million dollar enterprise.
In the early months of 1995, Craig Newmark founded Craigslist. Between 1999 and 2007, the company experienced the majority of its growth and success. Instead of listing in only one city in 1995, Craigslist took on nine more U.S. cities in 1999 and 2000. Four more cities were added between 2001 and 2002, and fourteen additional cities in 2003. By the time September 2007 rolled around, Craigslist had dramatically changed; it had then reached out to 450 cities in 50 countries. Just like a logarithm in a math equation, Craigslist was exponentially growing. Despite the continual expansion of the website, Craigslist still operates on a staff of 24 people at its headquarters in San Francisco’s Sunset District.
Many people wonder how a classified ad website such as Craigslist generates money. Craigslist’s CEO, Jim Buckmaster, told the UBS in December of 2006 that they have little interest in increasing their profit; their main focus and goal is to help subscribers and guests find jobs, housing, vehicles and dates. In addition to this, the website claims that the majority of their revenue will go to charities. To answer the question on how Craigslist makes money, it is mainly dependent on paid job ads in selective cities within the United States. They charge $25 an ad for job listings in Portland, Oregon, Chicago, Washington D.C., Seattle, Boston, San Diego, New York, and Los Angeles. For job listings in San Francisco, Craigslist charges $75. Additionally, in November 2008, they issued a $5 fee for erotic services.
So, just how popular is Craigslist? For starters, the Craigslist website experiences over nine billion page views per month. Because of this, it has been put as the 47th most popular site in the world and 9th most popular site in the United States. Not only is it ranked as one of the most well-liked sites on the Internet in general, it is the number one leading classified service on the web. There are over thirty million new classified ads and two million new job listings each month! The financial and ownership information on Craigslist is widely unknown because the site’s executives keep it disclosed. It is estimated, however, that in 2004, Craigslist’s revenue reached $10 million, $25 million in 2006 and possibly $150 million in 2007. It has also been said that Craig Newmark owns the largest share of Craigslist but Jim Buckmaster owns the next biggest slice with eBay following last at around 25%.
There are only a few things that can be attributed to Craigslist’s immense success, according to Craig Newmark. He says that his site gives everyday people a voice and a sense of trust within the Craigslist community. He believes that people will feel most comfortable when buying or selling a product or service on a website that allows for posting in an individual’s city. Also, Craigslist is run on honest values and standards, wonderful customer service, and above all, simplicity. Its plain format and simplistic design allow for a comfortable, inviting atmosphere for customers and visitors alike. Also, Craigslist’s non-commercial nature entices people to post on the site, as well. When Craig Newmark announced on his blog that eBay had purchased 25% of the company in August of 2004, many customers were afraid that it would eventually turn into an eBay-esque site. However, to this day, Craigslist remains non-commercial (including no banner ads) to accommodate their customers.
Despite all of the success and triumph that Craigslist has endured, there have been glitches, problems, criticisms, and lawsuits. In 2002, Craigslist was sued because it put a disclaimer on ‘men seeking men,’ ‘erotic services,’ ‘casual encounters,’ and ‘rant and raves.’ Craigslist wanted to ensure that people under 18 did not have access to these sometimes explicit, adult-only pages. However, there was not a disclaimer on ‘women seeking men,’ ‘men seeking women,’ or ‘women seeking women.’ This caused uproar with many customers and now, today, a disclaimer is put on every category in the personals section as well as other odds and ends categories.
In February 2006, Craigslist was sued by Chicago Lawyers’ Committee for Civil Rights Under Law for supposedly allowing their users to post discriminatory housing ads in Chicago. In September 2006, many websites alleged that Craigslist’s ‘Casual Encounters’ categories had been compromised by fraudulent ads to obtain personal information on people. One of the most alarming scandalous situations came in September 2007 when a woman from Minneapolis pled guilty to running an underage prostitution business through Craigslist. A Michigan woman was caught using Craigslist to hire a killer to murder a romantic rival in February 2008. In April of this same year, a couple was convicted of placing an ad on Craigslist that invited the public to take items for a man’s home in Oregon in order to cover up their own burglary of his home. Also in April, eBay sued Craigslist in order to “safeguard its four-year financial investment.” They claimed that in January of that year, Craigslist execs diluted eBay’s economic potential by more than 10%. Craigslist filed a countersuit on eBay in May 2008 that claimed eBay had damaged and caused possible harm to their “fair competition.” In May 2008, a Vancouver, British Columbia couple attempted to sell their week-old baby on Craigslist but the duo claim that it was just a joke. They are still being investigated.
Aside from all of this negative public scrutiny, Craigslist has maintained its popularity and number one spot for online classified advertising. In order to create a more safe site, they announced in November 2008 that they will be filtering ads for prostitution by mandating that for those who post an ‘erotic service’ ad, they will need to provide a valid phone number and credit card number. Also, a Craigslist ad can be flagged and removed if a Craigslist representative or even a fellow customer finds the ad inappropriate or against company guidelines.