Craigslist
Craig and Wall Street — universes apart
It was a few days ago now, but the New York Times’ DealBook blog had a great little item about Craigslist CEO Jim Buckmaster meeting with Wall Street types at the UBS global media conference. Naturally, the analysts wanted to hear a bit about the gazillions of page views that Craigslist gets, and how it is making about $50-million or so a year without even trying.
Jim, however, said the site had no real interest in maximizing revenue. Although he and Craig had looked at running ads, they had no plans to do so, he said, because — get this — users hadn’t said they wanted them. The only reason that Craigslist charges fees at all (to professional real estate agents for posting apartment ads in several cities) is that users complained about the ads, so the fees were instituted as a way of driving them away.
In the DeaBook pieces, Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She says UBS analyst Ben Schachter asked how Craigslist planned to maximize revenue. We don’t have any such plans, Mr. Buckmaster said. “It’s not part of the goal.” Mr. Schachter’s response: “I think a lot of people are catching their breath right now.” I’ll bet.
Craigslist currently gets a mind-blowing 5 billion page views or so a month. A premier site like Craigslist — and one that is focused on classified advertising, which is inherently purchasing-type behaviour — would likely command a fairly high CPM rate for ads. Let’s say theoretically it was $10 per thousand. That would bring in $50-million a month (StartupBoy says Craigslist is worth more than eBay, and he doesn’t even include ads).
But Craig would rather focus on the user. Brilliant? Or deluded?
Update:
Kevin Burton of TailRank says that Craigslist should be taking all that money from advertising and giving it to the poor (he expands on that idea here), but that Craig “thinks money is evil” (Craig responds in the comments that that isn’t true). Chuqui says Kevin and others should leave Craig alone and that Craigslist is being true to its vision. The Scobleizer agrees, and so does Nick Douglas at Eat The Press. And Dan Farber and larry Dignan at ZDNet took on this issue back on Dec. 7
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Brilliant! They are obviously making enough money to satisfy their needs for now and to focus on the user needs will only help to increase page views down the road. Thus, their untapped marketing revenue potential will only grow and grow. The skeptic in me says they will eventually cash in but the dreamer in me would like to believe that money is not their main driver. Sure would have been nice to sit in on that presentation as the suits jaws hit the floor at the revelation of a business not driven (well not totally at least) by the almighty dollar. Cool post!
Thanks, Tom. I agree — I think Craig’s approach is brilliant, and it’s a big part of why the site gets the kind of traffic it does.
But Craig would rather focus on the user. Brilliant? Or deluded?
It’s working for them, so ‘brilliant’. If they were going under and the model was not working then ‘deluded’.
[...] Mathew Ingram: Craig and Wall Street — universes apart If they were interested in making lots of money, Craigslist could be making as much as $50 million per month in advertising, Mathew Ingram estimates. (tags: craigslist advertising) [...]
[...] Update: Mathew Ingram tries to calculate how much Craigslist is worth: “Craigslist currently gets a mind-blowing 5 billion page views or so a month. A premier site like Craigslist — and one that is focused on classified advertising, which is inherently purchasing-type behaviour — would likely command a fairly high CPM rate for ads. Let’s say theoretically it was $10 per thousand. That would bring in $50-million a month (StartupBoy says Craigslist is worth more than eBay, and he doesn’t even include ads).” [...]
5 billion page views a month?
OMG.
Um, yeah :-)
If your penciling is right, Craigslist could pursue a social entrepreneurial model like goodtree and give 50% or close to $300m annually to worthy non-profits and charities. Problem is it’s not Craig’s or Jim B’s decision to make - it’s the users.
[...] Craigslist…couldn’t help but point people to this 5 billion page views a month…starting to approach my volume. :-)I guess we all assume businesses want to grow revenue. Heck, I’d be satisfied with a $50 million business that is useful to customers.Craigslist Link [...]
[...] Craig and Wall Street: Universes Apart [...]
Craig and Wall Street — universes apart via Mathew Ingram: mathewingram.com/work December 13th, 2006 at 03:49
[...] too bad that Jim and Craig have no interest in making billions of dollars, as they continually tell people — including the audience at mesh 2007, where Jim was one of the keynote speakers. Those guys [...]