WSJ on CraigsList and Zen of Classified Ads 278
prostoalex writes "Wall Street Journal profiles one of the Valley's most mysterious and secretive Web companies. A leader in online classifieds space and by some measures one of Web's top sites, CraigsList is ostensibly anti-ad and anti-self-promotion. From the article: "One industry analyst has estimated that Craigslist could generate 20 times that $25 million just by posting a couple of ads on each of its pages. If the estimate is to be believed, that's half a billion dollars a year being left on the table. What kind of company turns up its nose at $500 million?""
Hey! We were gonna milk that for all its worth! (Score:5, Insightful)
The kind of company that companies which wouldn't turn up their noses at $500 million doesn't want you to believe exists.
Companies can exist, thrive and even excel without taking advantage of every opportunity to maximize profit. This sort of company tends to be discomfiting to the type of company which would gladly throw some ads at you for extra revenue.
Companies like Craigslist and Costco--places that thrive on word of mouth, putting people ahead of profit, and genuine goodwill--tend to make "normal" companies uncomfortable. How do you compete when your competition has justly earned and kept the trust of the marketplace? How are you supposed to "optimize profits" with a consumer who knows what it feels like to be respected?
Business Ethics (Score:5, Insightful)
I didn't RTFA but... (Score:5, Insightful)
The kind that likes to keep its readership? How much would viewship go down if they had to be subject to ads? Or how many people will just get adblocking software? I know I already do.
Is that money they turned down for real? (Score:4, Insightful)
A company... (Score:5, Insightful)
* who genuinely thinks customers come first
* that wants nothing to do with the power plays in the industry (their power play is right there with their loyal customers!)
* dont want venture caps knocking on their door
* who hates the idea that facebook wants 2 Billion for less traffic and prestige than their site
* who feels that their size is good and right for them, not for wall street.
* whose leaders and owners can sleep without worries at night
Have you ever listened to Craig in an interview? Do so, and you'll find 10 more reasons than I cited, easy.
how shortsighted (Score:5, Insightful)
people also scoffed at google's little one-line blurb text ads when they came out. are they scoffing now?
i'm certain there are plenty of guys who would love to put interstitials and flash animation on craigslist. and such people would drive craigslist into the ground. you don't make money on the long term by destroying your user base's allegiance by pissing them off
so your choice is: make $500 million this year, and much less year and year after that, as your user base abandons you, by putting annoying ads on craiglist. or: make $25 million this year, and keep growing, and stay the place to go to for online classifieds for all time, since you have won and deserve and keep the respect and allegiance of your userbase
"the customer is always right" ever hear that one? some people just don't get it: they are very shortsighted. they are willing to destroy craigslist's user base for a fast buck, thereby making less money over the long haul. that's a nice sound business sense
The endless potential for benefit (Score:5, Insightful)
Sometimes, just creating a simple system of mutual benefit, and leaving it simple, is of much greater value than the usual constant gamesmanship of economically preditary behavior. Even in the middle of a ruthlessly free market.
Ryan Fenton
No, because that money does not exist long-term. (Score:5, Insightful)
There are other classifieds sites. We don't *have* to go to Craigslist. We go because we want to. If we stop wanting to, then Craigslist dies. Since ads would drive us away, allowing them would be short-term profitable and long-term suicide.
Re:A company... (Score:3, Insightful)
traffic in the first place.
What kind of company... (Score:5, Insightful)
Maybe it's worthwhile to heap accolades on Craigslist for being a "good" company. Or, just maybe, they're happy with reasonable year over year growth, rather than uncontrollably exploding, not unlike a supernova.
Besides, it strikes me that if the name of the game is for Craigslist to draw its members to view classifieds on its various sites, then it would be a disservice to those members who advertise on Craigslist to send the viewing members away from the site - even if classifieds are free. I kind of think that the idea of the sort of commercial ads mentioned in the WSJ article probably strays from the Craigslist business model.
-h-
Always lower prices. Always. (Score:5, Insightful)
Consumers are becoming more aware these days (Score:5, Insightful)
It's a tough concept to grasp but sometimes money isn't everything. At least Sergey is now realistic about the old "Do no evil" mantra but it's pretty sad to hear effectively, "Yes, we are filtering content for the Chinese government but... " I and I think many others stop when we hear rationalizations. Yeah it's a lot of money but consumers are waking up and paying attention. Google is helping an authoritarian government control its citizens, I don't want to hear rationalizations. Corporations need to start weighing in "ethical capitalism" costs. Sure the profits might be huge now but when you weigh in the ethical costs, those profits aren't so large.
The key to this consumer awarness is information. We can easily learn about sweatshops thanks to the internet. We can learn about content filtering thanks to the internet. We can learn about AT&T splicing fiber for the NSA thanks to the internet.
You can no longer rationalize and use advertising and PR as effectively as before, consumers are less ignorant.
Do you remember when Slashdot had no ads? (Score:5, Insightful)
If craigslist can survive without pimping ads to users, more power to them, and their userbase will only grow.
Diminishing Returns (Score:4, Insightful)
Sure, if craig's list had ads, they'd make some more money, but a lot of people, myself included, wouldn't visit as often or at all, and therefore the article's total sum of potential earnings is an over-estimate.
No need for ads, just hire more people... (Score:3, Insightful)
why do we give so much credibility to analysts? (Score:2, Insightful)
And how about Toyota? (Score:5, Insightful)
From the Wall Street to the WSJ to the board room, the culture of short term thinking to screw the customer is pervasive. It's all about rape and pillage for the shareholders, kill the company (after offloading the stock to E-Trade suckers) and then invest somewhere else. Where will investors go once US business is depleted? China & India of course.
magic word (Score:5, Insightful)
100% right on. you used the word "spam", and while i know you meant visual spam, it reminded me of something.
One of my favorite things about craigs list is that you *never* need an account to use it, so you know they aren't spamming you. no crap in the mail box, no crap in the box, so lots of people use it and it works.
their whole point has been conmunity-focused interaction. it's impossible to have a community if the participants are all on the receiving end of the host's spam. if they had ads, or required accounts, it wouldn't be a community, and it wouldn't be used the way it is
Dodging the cluestick (Score:5, Insightful)
They rely on their reputation, and part of that reputation is the lack of annoyances.
What amazes me is that this is not more obvious to so many people in the business world. The Web really just a series of interconnected user experiences. The author of this WSJ piece seems to think Craigslist is wacky - just plumb daft! - for forgoing potential revenue in favor of taking care of customers. After all, if Craigslist is taking care of its employees and making money, why wouldn't it want to have 10x the employees and 20x the profits! Why wouldn't it want to control the world?!
This snarky little tidbit reveals how little Mr. Carney understands Craigslist, the Web, and customer satisfaction. At the end of the day, all he can think of is all of that (vaporous, as biendamon pointed out) potential profit that *someone* is missing out on:
Argh! Someone put some banner ads on Craigslist, and do it quick, before Carney gets an aneurysm!
Craigslist has plenty of ads... (Score:4, Insightful)
More than money (Score:5, Insightful)
One led by a person believing there is more to their enterprise than money. I think I'd like to work there.
logical flaw in analists analysis (Score:3, Insightful)
If the free ads are worth less then there will be less customers.
Less customers, less content, less visitors, less paid advertising revenue.
Not to mention the incalculable value of goodwill and trust - I mean you just can buy that!
Better go back to analyst school there buddy.
Re:Hey! We were gonna milk that for all its worth! (Score:2, Insightful)
The lesson is that you can make profits, and increase profits, and build a stable, long term business plan that benefits _everybody_ in myriad ways (including with dollars and cents), simply my making prudent and judicious business decisions.
And you don't need to sacrifice any piece of the pie to make it work.
Your type of comments make these things sound like a zero sum game. If your ecological you have less profit. If you're family friendly you make less profit. That's crap. You can do both equally well and still compete w/ the archaic business models.
Re:how shortsighted (Score:3, Insightful)
chickens eating eggs (Score:1, Insightful)
25mil is good (Score:3, Insightful)
I can live on that.
Why Be greedy?
Re:Consumers are becoming more aware these days (Score:3, Insightful)
It is black and white, they are making money off of censoring Chinese citizens by collaborating with the Chinese government. This isn't complex.
Re:Fascinating. (Score:4, Insightful)
On the other hand, fidelslist and jungilslist are both pretty good, except that A) they do have banner ads, and B) Fidel and Jung Il are the only ones allowed to post to them.
Re:How about for charity? (Score:4, Insightful)
A company with a long view? (Score:1, Insightful)
Maybe they don't want to rake it in, only to find out that their base erodes, leaving them with "just another crappy ad infested pop-up site" that has to put more and more crap on their site to make money from the eroding customer base. Meanwhile the people that made it cool in the first place go off and create their own Craigslist, stealing away the sustainable model they have now and leaving them with a craptacular popup city populated by WalMart shoppers from AOL.
So, they are not really leaving anything on the table. The money that WSJ is talking about is only available if you cut open the golden goose.
Re:...Costco? (Score:5, Insightful)
Also, from what I hear, they have what is probably the most liberal return/warranty policy of any company on the planet, though I haven't had a need to exercise that feature.
I'm still cautious of huge "big box" retail chains, but on the whole, I'm pleased with CostCo. They seem to be non-evil and that's good enough for me. Plus, I can buy a5 gallon bucket of pickels without feeling guilty, and damnit, that's the way it should be.
Re:Business Ethics (Score:1, Insightful)
Re:Hey! We were gonna milk that for all its worth! (Score:3, Insightful)
Sole Proprietorships make make up the majority of businesses, but, if you look at it in terms of revenue, I think you will find the largest businesses make most of the money, and have the greatest economic impact.
Re:...Costco? (Score:3, Insightful)
If he is crazy, he is crazy like a fox. (Score:3, Insightful)
What kind indeed (Score:3, Insightful)
The kind that believes industry analysts and experts who say outrageous things are likely talking out of their asses.
Half a billion? I really really doubt it.
Re:...Costco? (Score:3, Insightful)
Re:Hey! We were gonna milk that for all its worth! (Score:3, Insightful)
Anybody can charge whatever they want to whomever they want (except where said freedom is taken away by government edict).
I can sell you my digital camera for $4, or I can give it to you, or I can refuse to sell it to you for $17,348.54.
I can single you out because you drive a BMW if I like (or, rather, because you're probably a prick, which is a good bet.)
What lifestyle? Do I have a secret life... (Score:2, Insightful)
Cool!
I should ask the folks on the N Judah or 6 or 43 bus about it.
Craig