These days, triple-digit annual growth rates are rare among major websites. Meet that rarity: Craigslist.
Exceptional, too, is the ability to draw 10 million unique visitors each month without ever relying on venture capital or equity markets. And the ability to attain fourth place among general-interest portals without spending a penny on marketing.
Signal accomplishments, to be sure, fit for boasting in an annual report. But Craigslist is a privately held company that has no such reports, and no burning interest in the competitive fray.
It does far more shrugging than boasting. Its management regards profits, which it has earned consistently since 1999, as merely the means to remain in control of its own destiny. Free of debt, it can do as it wishes to maximize what it calls its service mission without having to maximize profits. This is good news for its customers – that is, community members – and bad news for competitors whose shareholders are unlikely to regard community service as their own companies’ raison d’etre.
Until recently, Craigslist was the overlooked underachiever. Like eBay, it began as a free community service in 1995, a little experiment in applying technology to community-building, not profit-seeking.
Craigslist initially provided online listings of local events in the San Francisco Bay Area, the kind that could be found in an alternative newspaper. Visitors were encouraged to contribute, and they added the online equivalent of the mainstream newspaper’s classified section. Software handled e-mail forwarding.
Unlike eBay, which is dedicated to removing geographic obstacles to trading and defines “community” along national boundaries, Craigslist thinks and acts locally, organizing listings city by city for merchandise, jobs, real estate, personals, events, volunteer opportunities and discussion forums. It has moved at its own idiosyncratic pace, waiting five years after its start to add a second city, Boston. Today, it has sites for 120 cities in 25 countries and serves up 2.4 billion pages a month.
Craig Newmark, its founder, was, and remains, protective of the noncommercial character of the site. In the early years, he ran it in his spare time with other volunteers. Eventually, the traffic overwhelmed them; he quit his day job and imposed fees to pay for full-time stewardship. But he minimized the impact on the community by restricting the new charges to employers in San Francisco who placed job ads. Modest fees for employers in two other cities were added only last year, and only after Newmark invited Craigslist visitors to comment on the wisdom of the change; there were 3,000 remarks, all posted publicly. Today, 99.2 percent of Craigslist advertisements remain free.
If you’re the publisher of a local newspaper, you’re spending a lot of time thinking about Craigslist. Traditionally, local newspapers have derived 30 percent to 50 percent of their advertising revenue from classifieds.
Surprisingly, the momentum of this online alternative had not drawn much attention as recently as last fall, when Creative Intelligence, a consulting firm based in Altamonte Springs, Fla., surveyed the newspaper industry. It discovered that many executives were unaware of the arrival of Craigslist in their own cities. Nor were all aware that most ads on Craigslist were free.