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?
...Costco? (Score:2)
Re:...Costco? (Score:5, Informative)
Their profits are essentially the annual membership fee. Once you've paid that, you're buying everything pretty much at cost (including those higher salaries.)
They do not advertise and dispense with most of the corporate BS. Which means the customer doesn't have to pay for all of that overhead either.
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:...Costco? (Score:2, Funny)
Plus, I can buy a 5 gallon bucket of pickels without feeling guilty, and damnit, that's the way it should be.
Pregnant much? ;-)
Re:...Costco? (Score:2)
People Queue For Wal-Mart, Too (Score:3, Informative)
When one opened in a not-so-great neighborhood in Chicago, they got 25,000 applications (!) for 325 jobs. (http://www.suntimes.com/output/news/cst-nws-walma rt26.html)
Re:People Queue For Wal-Mart, Too (Score:3, Informative)
Re:...Costco? (Score:3, Insightful)
Returns (Score:5, Informative)
However, with Costco, you bring in your item and you get a replacement. Sometimes even when the warranty has already passed. For that reason I highly recommend them for such things as digital cameras, etc, simply because when it comes to returns, they don't treat customers like potential cons.
Re:...Costco? (Score:5, Informative)
There's a couple of not-necessarily-unbiased articles about it (both seem to take a WALMART BAD! COSTCO GOOD! spin, which while I probably agree with it, is pretty definitely a spin):
http://reclaimdemocracy.org/articles_2004/costco_
http://www.seattleweekly.com/news/0450/041215_new
Also, someone mentioned Costco sells items at their cost and only makes a profit on memberships. That does not appear to be accurate:
"Costco caps its profit margin on most products at 14% and allows itself slightly higher margins only on its Kirkland Signature store brand (a name derived from its previous headquarters in Kirkland) with a strict 15% profit limit."
(From the Costco page at Wikipedia, with a reference to a source article.)
Re:...Costco? (Score:3, Insightful)
Re:Hey! We were gonna milk that for all its worth! (Score:5, Informative)
Craigslist is the exception that proves the rule. Consider the following facts:
I actually find Craigslist's money policies a little short-sighted. Not that I'm entirely against them providing free ads. It's nice that you can post your resume, or sell your couch, or ask somebody to come and fix your computer, and you don't have to pay. A lot of the people who use these services couldn't afford to use them if they weren't free.
But why should all the people dealing in real estate get a free ride? I don't mean people who just want to split their rent with a roommie. I'm talking wealthly landlords [craigslist.org] and folks selling million-dollar homes [craigslist.org]. Who benefit not just from the fact that Craigslist is free, but the fact that the housing search software is well-designed. They should pay. If Mister Newmark doesn't want the money, there are plenty of worthy causes.
Re:Hey! We were gonna milk that for all its worth! (Score:5, Interesting)
Sole? Sole proprietorships and very narrowly, privately held corporations, partnerships, etc. make up a large percentage of businesses, and many of them operate in accord with interests of their owners beyond simply maximizing financial return or market value of the business.
Widely, publicly held companies whose management's sole duty is to maximize the financial return to the owners may make up most really big businesses, but they certainly aren't most businesses.
Re:Hey! We were gonna milk that for all its worth! (Score:2)
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:Hey! We were gonna milk that for all its worth! (Score:2, Informative)
A society could do a lot worse than have economic policies which favored small businesses, and to ignore the desire
Re:Hey! We were gonna milk that for all its worth! (Score:3, Informative)
Re:Hey! We were gonna milk that for all its worth! (Score:4, Informative)
Re:Hey! We were gonna milk that for all its worth! (Score:2)
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.)
Re:Hey! We were gonna milk that for all its worth! (Score:3, Informative)
Actually, ebay owns 25% of Craigslist [cnn.com].
Re:Hey! We were gonna milk that for all its worth! (Score:2)
This kind of company can only exist when it's not publically owned. The pressures of revenue growth on public companies would never allow
Re:Hey! We were gonna milk that for all its worth! (Score:2)
Re:Hey! We were gonna milk that for all its worth! (Score:2)
And there was no "business philosophy". Craig Newmark didn't set out to found a business. He just started the site as a free service, paying all costs out of his own pocket. He resisted making any of his advertisers pay for a long time. Finally, the thing grew to point were he had to choose between developing some revenue and shutting the thing down.
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 buil
Re:Hey! We were gonna milk that for all its worth! (Score:2)
Give it some time (Score:2)
Craigslist will be no different once the smell of money corrupts them enough. Its the way of the world.
Re:Hey! We were gonna milk that for all its worth! (Score:3, Interesting)
the kind of company that knows it has more of a future by restraining its greed rather than by indulging it.
Unheard of... (Score:5, Funny)
Perhaps, one that has decided that it doesn't need $500 million?
I know, it hurts my brain too.
Re:How about for charity? (Score:4, Insightful)
Re:How about for charity? (Score:2)
They can just put it in my Swiss Paypal Account.
Timescope (Score:2, Funny)
Business Ethics (Score:5, Insightful)
Re:Business Ethics (Score:5, Funny)
Re:Not even close (Score:2)
If the indutry analyst's wife likes that type of thing, then she's passing up a lucrative way to leverage her operational experience in a dynamic and verically stimulated market.
Works for me.
Re:Not even close (Score:2, Funny)
Sorry, couldn't resist.
Re:Business Ethics (Score:3, Funny)
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.
Re:I didn't RTFA but... (Score:2)
Probably not at all. Slashdot/OSDN has some of the most anti-ad customers. I consider some of their ads to be one step more elegant than "Punch the monkey", which isn't saying much. You didn't see them back out with their tail between their leg, did you?
Re:I didn't RTFA but... (Score:2)
Y'all should try reading the next sentence in TFA! (Score:2)
"What kind of company turns up its nose at $500 million? That's what I'm here to find out."
IOW, that was a teaser, transformed into an ideal troll for an endlessly gullible, non-TFA-reading Slashdot audience. And just to complete the loop, the end result of this is to drive up ad revenue on Slashdot. Gotta love those virtuous circles!
Is that money they turned down for real? (Score:4, Insightful)
Re:Is that money they turned down for real? (Score:5, Informative)
Re:Is that money they turned down for real? (Score:2)
The kind of company.. (Score:4, Interesting)
Also, sometimes when running a business, the best place to be is not necessarily the "biggest" and/or "most visible" place to be. Not every company dreams of or wishes to aspire to growing into some kind of huge behemoth like Wal-Mart.
---
http://wi-fizzle.com [wi-fizzle.com]
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
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.
Re:A company... (Score:3, Insightful)
traffic in the first place.
Re:A company... (Score:2)
I am curious. Who are the customers? What does Craig do to pay for the sites? I thought he doesn't charge for listings, he doesn't charge for browsing, doesn't take ads. I don't really use the service, so I don't know.
I do think it is hypocritical of people to demand a high quality site with no ads and no fee to use. It takes work and not a lot of people don't want to do that work without a tangible return. I know I wouldn't spend hundreds of hours in the ser
Re:A company... (Score:2)
Am I a multi-millionaire? (Score:2, Informative)
Craig
Re:A company... (Score:3, Informative)
"All posts are free, except for:
-job listings in New York City, Los Angeles, and the S.F Bay Area
-brokered housing posts in New York City"
Re:A company... (Score:2)
Funny that. We're well used to being told that company exploiting its users to the nth degree is justifided. Invariably cited are "market forces", "supply and demand" or the holy of holies "capitalism". How odd that when consumers apply the same yardstick, suddenly it's "hypocrisy".
I expect it's Jolly inconsiderate of Cragslist. Encouraging that sort of thinking in the marketplace.
Re:A company... (Score:2)
If they wanted to do this, and give most of the money to charity, that would be even cooler.
Hmmm... so, here's an anti-bu
Re:A company... (Score:2)
where is the hypocracy?
You could do like Craig did, but with your model
as above and see how it works.
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
Re:how shortsighted (Score:2)
Google make nearly all of their income from advertising, that's not a very good example. Ads haven't driven people away from Google, so who's to say they'll do the same for craig's list?
Re:how shortsighted (Score:3, Insightful)
The mind boggles (Score:5, Funny)
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.
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!
Ad me Spam me Put me in a can! (Score:2)
My poor friend fell for this and after 3 months her PC became unusable. She did get a check for $2.33, but it wasn't worth it.
We should just infect Carney's machine in order to leverage his whatever. He'll stop complaining about not enough ads on the intarweb.
Re:No, because that money does not exist long-term (Score:2)
The idea of keeping long-term economic viability in play is so last decade.
Re:No, because that money does not exist long-term (Score:2)
Didn't the dot-com boom (and bust) occur in the last decade?
Points from TFA (Score:5, Informative)
And that's pretty much it. The guy is happy and making enough money as-is, apparently.
Fascinating. (Score:4, Interesting)
I love the 'give us the money instead' comment, though. I've always wondered if there would ever be a way for an Internet company to farm big corporations for real people.... At first, I thought that that was what Google ad revenue was doing.
Re:Fascinating. (Score:2)
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.
Who is to say.... (Score:2, Interesting)
And now for a cliche-prediction-bomb: mark my words... all good things come to an end... Eventually every business capitulates to the almighty buck and CraigsList will not "buck" the trend.
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-
Re:What kind of company... (Score:2)
I'm kind of intrigued by the company - it's very focused on its market which is probably not a bad way to be. The (very large) company that I worked for tried to be an everything to everyone company about 15 years ago and almost went broke because it became a monster that lost focus of what the suits call its "core competenc
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.
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:Consumers are becoming more aware these days (Score:2)
Thanks for hte laugh.
Chinese citizens have their own ways around the filters, and besides, it's filtered no matter what, the question is who does the filtering.
When their revolution happens thanks in part to ethical companies not condoning the Chinese government's authoritarian actions, then you can have pure unfettered access to the Chinese consumer. Of course, with companies like Google collaborating with authoritarian governments like the one in China, the revolution will probably nev
Re:Consumers are becoming more aware these days (Score:2)
Public companies must make their shareholders happy, privately owned companies like Craigslist have obligations only to themselves. Does ol' Craig need $500 billion? He can probably deal with a cool million or so a year and the peace of mind knowing that he hasn't contributed to evil an
That's an easy question (Score:2, Redundant)
The list can go on and on. I for one applaud craigslist, and the fact that they DON'T advertise on their site is the reason I use it more than just about any other site.
Re:That's an easy question (Score:2)
Actualy I'd say Craigslist is in it for the money. They're just in it for the money year after year after year for the rest of the owner's life if possible. As Buckmaster noted, they may not be making huge bucks but, unlike a lot of Internet ventures raking in larger revenues, Craigslist has been profitable for 6-7 years now and shows no signs of losing money or going away anytime soon. They aren't making as much every year as they could be, but they'll be making it for a lot more years than they would if t
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)
Re:No need for ads, just hire more people... (Score:2, Funny)
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.
Reporter not so clever (Score:2)
"Having taken advantage of their hospitality for the better part of an afternoon, I stand to take my leave, but my hosts insist on driving me back to my hotel. Once there, we say our good-byes and, belatedly, a thought occurs to me -- an afterthought, perhaps. If Craigslist does what its users ask of it, and Craigslist doesn't need or seem to want all the ad revenue it declines to collect, maybe we, as end-users, should ask them to post some banner ads and give us the money instead.
There's somethin
Re:Reporter not so clever (Score:2)
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.
It's a question of ethics (Score:3, Interesting)
With my company (http://www.beskerming.com [beskerming.com]), we run no ads on our site, and our free mailing list [skiifwrald.com] is just that, free. There are no subscription fees, no advertising, no vendor pitches (besides our own occasional announcement), no spam, and no vendor sponsorship. It keeps our readers happy, and we have seen our influence stretch to over 400 million people via those responsible for their information and
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.
25mil is good (Score:3, Insightful)
I can live on that.
Why Be greedy?
The Sound of One MBA Getting It (Score:2, Interesting)
What's so "zen" about running a company you'd prefer to use yourself, even if you're rich? The Wall Street Journal doesn't seem to unde
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:I Had No Idea (Score:5, Interesting)
Re:I Had No Idea (Score:2, Funny)
Re:craigslist revamped recently (Score:2)
Re:What kind of company? (Score:2)
Next year there may be another online classified service that puts Craig completely out of business. I'm all for building community and all that stuff, but I still think it's foolish to leave money on the table unless you really don't care. If they are satisfied with their current revenue level that's great, if they are holding out for something bigger 'next ye