As one of the leading internet
classified ad services in the world, Craigslist has expanded itself into a
probable $150 million-a-year enterprise. The history of Craigslist's
roots is surprisingly humble considering its substantial success today. In
1995, Craig Newmark created this online service for the San Francisco Bay
Area. The first postings were nothing impressive; they consisted of
social event notices that were of interest to Internet developers who were
living and/or working in the San Francisco Bay area. These initial
postings debuted in early 1995 but like all new technology, the system came
across some glitches and limitations. In June of 1995, the software,
majordomo, was installed and Craigslist resume its operation.
In 1999, Craigslist was
incorporated into a private for-profit company that led to its expansion into
nine additional U.S. cities; four more in 2001 and 2002 and fourteen in
2003. By September of 2007, Craigslist had reached an impressive 450
cities in over 50 different countries! However, many things occurred
during the early 2000s that attributed to its success. The main
contribution to the expansion of Craigslist relied heavily through the word of
mouth. By this method, the number of postings and subscribers grew
exponentially.
Interestingly, only 24 people
operate Craigslist at its modest headquarters in San Francisco. Craig
Newmark attributes Craigslist's victory to its simplicity, honest values,
exceptional customer service, and for its trusting quality. For example,
people feel more comfortable posting an online ad within their own community
versus posting an ad throughout their state or, in some cases, the entire
country.
Craigslist's main source of
revenue is their paid job ads in select cities. These cities include: San
Francisco Bay, Los Angeles, San Diego, Boston, Seattle, Washington D.C.,
Chicago, New York, and Portland, Oregon. Craigslist charges $25 per ad
for all of the cities except for San Francisco which charges $75 per ad.
As recently as November of 2008, Craigslist has added a charge of $5 for erotic
service listings. According to Newmark, despite Craigslist's high
earnings, the revenue that the website makes will likely be donated to
charities.
Now, on to some of Craigslist's
alarming statistics. It is placed as the 47th most popular website worldwide, as 9th place website
in the United States, and Craigslist serves over nine billion page views per
month! Perhaps one of the most prevalent postings on Craigslist is job
ads. The website gets an estimated two million new job listings per
month. This fact alone makes Craigslist one of the top job boards for
online classifieds in the world!
Although the Craigslist company
will not disclose their financial or ownership information, recent research
estimates that their annual revenue has more than quadrupled since 2006!
It has been reported that Craigslist earned about $20-25 million in 2006 and
has probably exceeded an unprecedented $150 million in 2007. As mentioned
before, Craigslist ownership is widely unknown but it assumed that eBay owns
around 25%, and Jim Buckmaster, Craigslist's CEO, and Craig Newmark,
Craigslist's founder, own the largest share.
As can be seen, the popularity
of online classifieds is immense in more ways than one. Not only does the
classified ad website, such as Craigslist, make an enormous amount of money,
the people who post ads are at a benefit as well. It has been proven
through companies like Craigslist that products are more likely to sell when
they are posted online because more information is provided along with the
product. In addition, images and sometimes video clips can accompany the
product or service that is for sale. Newspaper ads have become a thing of
the past. They are not nearly as accessible or convenient than an online
classified ad.
They typically cost money and
are limited in description and quality. It also takes more time to post a
newspaper ad than an online ad. Online classifieds are posted right away;
there is no submission process that wastes time. Also, they are typically
free unless a featured ad option of some kind is chosen. Overall,
newspaper classified ads are not as efficient or practical as online
classifieds.
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