from The Boulder County Business Report, January 23, 2004
Simple does the trick for classified ad Web site
By David Clucas
Text-only Craigslist.org popular in 30 major cities
News Story originally published in Boulder County Business Report, Jan. 23, 2004 In today's high-speed Internet world of flashy graphics and pop-up ads, Web site developer Craig Newmark has found success with just text and a white background.
The simple formula for his online classified ads is drawing more than four million visitors per month to the Web site, and they post about 1.5 million ads per month -- for free.
What began in 1995 as a small list of daily happenings in San Francisco, Craigslist.org has grown to become one of the leading online classifieds sources for more than 30 cities in the United States (including the Denver/Boulder metro area), Canada and the United Kingdom.
All of this has been done with no advertising for the Web site, Newmark said. "It's all word of mouth."
"We see ourselves more as a community service," Newmark said. "We run our business in a very noncommercial way." Revenues for the site are solely generated by businesses that pay to put their job postings on Craigslist.org. Newmark said he charges $75 for these business postings, but only in San Francisco, where the site has its largest following. For everyday people looking to sell that old used television or rent out an extra room, the service is free.
Newmark declined to release yearly revenues for Craigslist.org, but said the business makes enough to pay a 14-person staff. Several advertisers have offered to place paid commercial banner ads on Craigslist.org, but Newmark always declines, saying that the site's popularity is largely due to the lack of annoying ads. Newmark said several larger companies wanting to purchase the entire Craigslist.org business have approached him -- again he declines.
It's Newmark's belief that quality customer service will continue to outweigh flashy advertising in attracting a strong customer base.
"We have earned a culture of trust with the people, and it's my intent is to keep earning that every day," Newmark said.
For the most part, it is Craigslist.org users that do most of the work for the Web site. Through an e-mail posting service created by Newmark, users can post their classified ads to Craiglist.org within hours. Afterward they can edit or remove the ads as they please. Craigslist.org is split by cities and classified categories. It is then searchable through keywords.
In the Denver / Boulder metro area, Denver.craigslist.org has become a popular source for the area's many newcomers who search for jobs, housing and activities.
For 22-year-old Jessica Matzuk, her move to Boulder this fall was made easier with Craigslist.org. While she still lived thousands of miles away in Virginia, Matzuk said she could easily contact people in Boulder with apartments through Craigslist.org.
"I found out about Craigslist from some friends in New York last summer. When I moved to Boulder I used it to e-mail several people here, and one of them had a room in a house that was ideal for me." Matzuk also said she found her bed through Craigslist.org, and she frequently uses the site to search for social activities, classes and concerts.
"It's better than the newspaper (classifieds), because it's free and people can include a lot more detail on Craigslist, and it's easier to search," Matzuk said. "For anything that's happening, the Internet is now the first source that I check."
That growing sentiment, particularly among the younger generations, has many print publications scrambling to see how they can increase their role in the Internet world of people communication. The surge in the online classified business coupled with a sluggish economy has declined overall print classified revenues nearly 20 percent in the past two years and nearly 40 percent in print job-listing revenues, according to Poynter.org, a professional journalism Web site.
In response, many newspapers like the Daily Camera in Boulder have added all their classified ads to their online editions where they are more easily searched and accessed. And in November 2003, two major newspaper publishers, Knight Ridder and The Washington Post Co., invested $6.3 million in Tribe.net, an online people networking Web site, with hopes to boost their online classified business.
At the Daily Camera, Classified Advertising Supervisor Kelly Hendershot said the print classified business in Boulder has remained steady during the past few years, despite the free online competition. The Daily Camera has numerous classified rates depending on which kind ad a person wants. A three-line product classified costs $14 for a 14 days, a three-line, seven day job posting is $38, and a real estate ad is $1.33 per line per day.
While Web sites like Craigslist.org and Monster.com (an online job posting Web site) do provide competition, Hendershot said the national services still can't match the local reach of the Daily Camera.
"With the Daily Camera it's already assumed that you can find, for example, a rental house in Boulder," Hendershot said. "You're going to get fewer people who know about Craigslist, so even though it's becoming pretty popular among younger people, there may only be 20 things compared to thousands in the Daily Camera."
Actually, a housing search narrowed to Boulder on Craigslist.org yielded about 300 results within the past month, compared with about 1,000 housing postings at DailyCamera.com during the same time period.
Newmark said he doesn't expect Web sites like Craigslist.org to take all the business away from print newspapers.
"Even I like to sit in a coffee shop and read the newspaper," Newmark said.