Damn It Craig, Why DON'T You Wanna Make Money?
Louis Hau writes on Forbes.com about something that baffles newspapermen and capitalists...a company that DOESN"T WANT to make big money.
"Craigslist President and Chief Executive Jim Buckmaster isn't nuts. He just sounds that way, particularly to anyone who thinks that the point of running a business is, you know, to make money. Speaking in an unflappable, near-monotone, Buckmaster calmly discussed with UBS analyst Ben Schachter a business model which, by any rational standard, is completely insane. And yet it's also been shockingly successful, at least in terms of traffic. Craigslist has revolutionized the classified advertising market with its free listings for everything from real estate to jobs to personals. Newspaper companies, in particular, have been hit hard.
So how exactly does Craigslist make money?
By charging $25 for job postings in six of its largest U.S. markets and $75 for job listings in San Francisco and by assessing a $10 fee for brokered apartment listings in New York City, Buckmaster replied.
Period. End of story. All other listings in those markets are free, as are all listings in the more than 100 other markets the company serves in the U.S. and overseas.
"Is maximizing profit not part of the equation?'' Schachter asked.
"That's definitely not part of the equation,'' Buckmaster said. "That's never been a goal ... We have been fortunate to do well by doing good, whatever phrase you want to use, by focusing only on improving the service for users.''
"We certainly have been approached about putting text ads on the site quite a few times,'' Buckmaster said, adding that, "The numbers are quite staggering, the amount of revenue that could be added.''
So why not add them to the site?
"No users have been requesting that we run text ads,'' he replied, as if that were a perfectly sensible answer. Why not raise funds through equity investments or advertising and then give the money away to charity, Schachter asked.
"I think it's a valid argument and one that we don't necessarily have a persuasive answer for,'' Buckmaster said. "That is a proven model for doing good in the world. It just doesn't happen to be our model. Ours is to try to be as philanthropic in our core business as we can be and leave all the money out there in the hands of users.''
We now return you to your regularly scheduled reality, already in progress.
"Craigslist President and Chief Executive Jim Buckmaster isn't nuts. He just sounds that way, particularly to anyone who thinks that the point of running a business is, you know, to make money. Speaking in an unflappable, near-monotone, Buckmaster calmly discussed with UBS analyst Ben Schachter a business model which, by any rational standard, is completely insane. And yet it's also been shockingly successful, at least in terms of traffic. Craigslist has revolutionized the classified advertising market with its free listings for everything from real estate to jobs to personals. Newspaper companies, in particular, have been hit hard.
So how exactly does Craigslist make money?
By charging $25 for job postings in six of its largest U.S. markets and $75 for job listings in San Francisco and by assessing a $10 fee for brokered apartment listings in New York City, Buckmaster replied.
Period. End of story. All other listings in those markets are free, as are all listings in the more than 100 other markets the company serves in the U.S. and overseas.
"Is maximizing profit not part of the equation?'' Schachter asked.
"That's definitely not part of the equation,'' Buckmaster said. "That's never been a goal ... We have been fortunate to do well by doing good, whatever phrase you want to use, by focusing only on improving the service for users.''
"We certainly have been approached about putting text ads on the site quite a few times,'' Buckmaster said, adding that, "The numbers are quite staggering, the amount of revenue that could be added.''
So why not add them to the site?
"No users have been requesting that we run text ads,'' he replied, as if that were a perfectly sensible answer. Why not raise funds through equity investments or advertising and then give the money away to charity, Schachter asked.
"I think it's a valid argument and one that we don't necessarily have a persuasive answer for,'' Buckmaster said. "That is a proven model for doing good in the world. It just doesn't happen to be our model. Ours is to try to be as philanthropic in our core business as we can be and leave all the money out there in the hands of users.''
We now return you to your regularly scheduled reality, already in progress.
posted by Max Hartshorne at 6:23 PM
1 Comments:
truly refreshing, even mystifying. sounds like someone speaking from a higher plane of existence
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