Craigslist vs Classifieds

OJR (Mark Glaser) asks: “Craig Newmark started the community site as a hobby, but it soon became a San Francisco area institution for selling cars, getting jobs and finding sex. But just how much has it eaten into newspapers’ traditional classifieds business, and can they win that back?”

Started nearly 10 years ago by soft-spoken software engineer Craig Newmark, Craigslist went from a small e-mail list of local events and parties to become a national and international phenomenon providing local residents with a cheap, simple way to sell junk, find a new job, or find a mate quickly. And as it has grown to encompass 45 cities — with more to come — Craigslist has resisted buyout offers and paid advertising while becoming a powerful alternative to daily newspaper and alternative-weekly classifieds — especially in its hometown.

I stopped by the funky whitewashed basement and Victorian flat offices of Craigslist recently, and chatted with Newmark, whose eyes flitted to his computer screen from time to time to monitor activity and complaints that come streaming into his inbox. Though the staff has grown to 14, including a recent customer service manager, Newmark still spends 40 hours per week helping to deal with scams, community problems and other customer service details.

The only income the site gets is from for-profit companies that run job listings in the San Francisco Bay Area, though Newmark said he is considering charging for similar job listings in New York City and Los Angeles. Though many people assume that the site is a nonprofit because of the dot-org in its name, it is a private, for-profit site that does not share its financial information with the public.

Newmark told me that many of the ads on Craigslist wouldn’t be placed in newspapers at all, and come from a hipper online audience. Liddy Manson, vice president and general manager of jobs, cars and real estate for, says that sites like Craigslist and eBay focus on consumer-to-consumer transactions, while the Post’s bread and butter is business-to-consumer ads from car dealers, real estate brokers and recruiters.

“As far as I can tell, Craigslist has really taken over the classifieds business in San Francisco, and it’s not there in (Washington) D.C.,” Manson told me in a phone interview. “That doesn’t mean it’s not going to mature and grow and become more than it is today. It’s only been in D.C. for 14 months. There’s no doubt that Craigslist is making us think about our business differently, and making us think about what the hot buttons are for this community — both in terms of what people are buying and selling, but also in terms of what makes a community come together around certain types of activities.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.