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from Investor's Business Daily, May 15, 2003

His Little Net Idea That Could
By Pete Barlas

When it came to the arts and technology, Craig Newmark had the 411.

He regularly collected information about events involving both around San Francisco's Bay area, and wanted to share it with friends.

Being a computer programmer, he sent them e-mails about the newest openings, items for sale, job openings and cutting-edge technology.

He started by sending the e-mails to a dozen friends. The e-mail got passed around and multiplied.

Weeks later, Newmark sat in front of his computer staring at reams of e-mail messages.

"Sometime in late 1995 I realized that I had all of this e-mail sitting around," he said. Newmark began mentally listing his options to get through the e-mails. He decided to play to his strength.

"I thought, 'I'm a programmer; I can write code and turn all of this e-mail into Web pages,' so I had instant Web publishing," he said in a recent interview.

By this time, users had branded the e-mail lists as "Craig's List." A bashful Newmark wanted to change the moniker, but his friends insisted he keep the name because so many already identified it that way. He decided their advice was spot on.

"One big lesson I learned is that there are a lot of people around who are much smarter than I am and I should listen to them," he said.

That informal event list morphed into his firm, Craig's List (craigslist.org), one of the most heavily trafficked communities on the Web. Millions of people have flocked to Craig's List to get information to buy a product, find a job, a mate or a place to live. The list is considered the premier online job site for technology workers in the country.

Newmark, 50, is the company's founder. But he's not driven by ego; he knows exactly when something is too big for him to handle alone.

So as traffic increased, he let his customer service staff have more control of the site.

"The people on the front lines of any company - they know how to run it better than people in management," he said. "That's why customer service has a lot more control over policy than I do."

For The Company's Good

Newmark promoted staff member Jim Buckmaster to replace him as chief executive in late 2000. Newmark remains chairman.

"The guy who started this company is not the right guy to lead it into the future, so I demoted myself and hired a different guy," he said. "He's a much better manager than I, and he's an entrepreneur."

Traffic at Craig's List climbed to 1.6 million unique visitors in March from 699,000 in April 2002, says market tracker Nielsen/NetRatings.

Craig's List isn't like most Web sites; it doesn't carry photos, ads or graphics. Newmark wanted to keep it simple so that it would remain easy to use for even the most tyro Internet user.

That simplicity is a big reason its traffic has doubled in a year, says Abha Bhagat, senior analyst for Nielsen/NetRatings. "It's very clean; you don't have to wait for a bunch of ads or graphics to load up," she said.

The lack of ads makes the site friendlier to consumers, says Charlene Li, analyst for market tracker Forrester Research Inc.

"It's easy to use and there's a lack of a commercial feel, so people trust it," she said.

The site also works. Li used Craig's List to give away moving boxes after moving to San Francisco.

Li posted a listing at 8 a.m. Ten minutes later she got an e-mail inquiry. By 8:20, the e-mailer arrived with a truck to take the boxes, says Li.

"That's the power of putting a local marketplace online," she said.

Craig's List has also attracted companies. In 1997, Microsoft Corp. offered to post banner ads on the site.

Newmark doesn't like banner ads; he figured it was a good bet that others didn't either. At the time, Newmark was still working as an independent contractor and could afford to pass on the offer.

Still, Newmark is practical. Realizing how much employers had begun to use the list to find workers, in 1998 he began charging Bay area employers and recruiters for posting job ads.

To make sure he was keeping his users happy, Newmark checked online discussion boards before making the change. "Everything we do is guided by people in the community," he said "I already knew from feedback that people considered that to be morally appropriate."

Craig's List carries 60,000 listings a month. Roughly 4,000 are job-related.

Today, Newmark charges for job listings only in the Bay area.

The company is capitalizing on a small but flourishing market, says Newmark.

"We don't know who built critical mass anywhere else for job postings," he said. "More importantly, we are making enough money to pay the bills."

Newmark won't say how many listings are paid. The revenue is enough to pay his staff of 13 workers, including him.

As a child, Newmark didn't have it easy. His father died when he was 13. His mother, a bookkeeper, raised him and his younger brother in Morristown, N.J.

Geek Chic

Newmark developed a penchant for technology early in life. He says he was the classic nerd, wearing a pair of black glasses taped together and a plastic pocket protector in his shirt pocket.

He concentrated on developing his technical skills in high school, spending hours working on an old IBM computer.

Passionate about computers, Newmark decided to pursue a career in the nascent field. He designed his own schedule of classes to equal a computer science degree at Case Western Reserve University.

After earning a master's degree, Newmark worked as a software engineer for IBM, then for Charles Schwab & Co. developing computer security systems and providing general consulting.

Looking for more challenges, Newmark set up shop in 1995 as an independent contractor. He developed software systems for clients such as Xircom (now owned by Intel), Bank of America and Sun Microsystems.

Working at other companies as an independent contractor taught Newmark that the customer is king. Newmark spends at least 50 hours a week working on customer service at Craig's List.