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How does Craigslist make money

1.02 K Views | Rishi Kashyap | 1 FOLLOW

    How does Craigslist make money


    I was wondering how does Craigslist make money. I mean it does not have a single banner, its full of links, has bare minimum graphics yet boasts of making millions !

    Lots of Indians do not know of this bizarre classified ads website called craigslist.org ! In fact, in India people know about "OLX" and "Quikr" which to me seems heavily inspired by Craigslist and which uses Google Adsense links to monetize itself. Craigslist on the other hand never supported irrelevant ads on their website and had reportedly declined Microsoft's million dollar banner advertisement request in late 90s. Yes, Craigslist has happily existed for more than a decade following their own business rule of "making money, yet not working for it".

    Lets first understand what and how big is Craigslist. Craigslist was started in 1995 by Craig Newmark as an email list of SF events. As it gained popularity Newmark converted it into a free website where events could be posted by almost anyone and viewed free by anyone. The idea was never to make money, but to make the information available to everyone. The company was registered as a non-profit initially, changed to for-profit organization in 1999 and since 2000 is run by Jim Buckmaster, another like minded CEO. Craigslist deliberately kept a ".org" domain to symbolize relatively non-commercial nature, public service mission, and non-corporate culture of craigslistWhat makes this "Local classifieds and forums" website so special

    1. Traffic - 50 billion page views per month
    2. Users - 60 million people use Craigslist each month in US alone
    3. Posts - Over 80 million classified ads each month
    4. Employees - 40+ Craigslist staff at office located in San Francisco, CA
    5. Expansion - More than 700 local sites of Craigslist in 70 countries
    6. Charity - Craigslist Charitable Fund (CCF) funded by Craigslist, donates millions each year to worthy charities.
    So coming back to how does Craigslist make money ? Simply because 99% of Craigslist users never pay for classified ads, they think Craigslist is free ! Craigslist however, does charge for certain types of advertisement listed below

    Advertisement typeLocationDurationFees chargedComment
    Job PostingSF Bay30 days75 USDPer job per category
    Job PostingAtlanta, Austin, Baltimore, Boston, Central NJ, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Detroit, Houston, Inland Empire, Jacksonville, Kansas City, Las Vegas, Long Island, Los Angeles, Minneapolis, Nashville, New York City, North Jersey, Orange County, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh, Sacramento, St. Louis , San Antonio, San Diego, Seattle, South Florida, Tampa, Washington DC.
    30 days25 USDPer job per category
    Brokered apartment rentalsNew York City30 days10 USDNone
    Therapeutic servicesUSA7 days10 USD5 USD for repost
    cars/trucks by dealerUSA30 days5 USD5 USD for repost
    Tickets by dealerUSA30 days5 USDNone
    Craigslist also earned thousands from its adult service but later shut it because of complaints that Craigslist was promoting prostitution and child sex trafficking.

    How much money does Craigslist earn ?
    Unlike Whatsapp (How does Whatsapp make money) calculating Craigslist earning is not that simple as there are many variables involved. Craigslist revenue comes from advertising and charging for above listed ads but how many ads get posted under each category on an average is never disclosed by Craigslist.  Still Craigslist expected earnings can be summarized as
    1. 2010 approx 121 Million USD
    2. 2011 approx 115 Million USD
    3. 2012 approx 126 Million USD
    Craigslist shuns discussing their earning, its CEO casually says that they are more interested in helping its users than maximizing profit. A website which could easily make billions by other advertising models have stayed stale since 90s because "users never requested to run text ads". It is for these reasons that its CEO is described as anti-establishment, a communist, and a socialistic anarchist, since 2000 Jim has led craigslist to be the most used classifieds in any medium, and one of world's most popular websites, while maintaining its public service mission, non-corporate vibe, and staff of 30-some.Craigslist competition is increasing, few years ago they started their expansion plan and today they are present in 70 countries. They are presently employing Javascript experts probably for their mobile presence. While we can debate whether their complacent approach will be acceptable in the long run, but for the time being there have been no complaints. Will Mr Jim Buckmaster change his strategy on how Craigslist makes money or stay as it is, only time will tell !  How does Craigslist make money

    Rishi Kashyap | | EDIT | REPLY