Is Craigslist Killing Newspaper Revenues?
Jarrett Martineau | December 24, 2007 at 03:28 pmby
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Computerworld, Craig Newmark, the founder of Craigslist.org, discusses the success of the site and refutes that claim that it is having any significant impact on the classified revenues of major newspapers.
Why has Craigslist been so successful? How did you get the whole world to know about it and use it? There are some easy reasons. We were an early mover doing what we do and it does help that the site is almost all free. We think we have a really good culture of trust and that's because without consciously doing so, we have stood by some core-shared values. The fundamental value is that we feel you should treat people like you want to be treated, which means that you provide good customer service and it means that you should have a "live and let live attitude," and it means that now and then you give the other person a break. These are values that most everyone in the world shares. The problem that a lot of people have is following through with those values. That's hard to do sometimes. And I do want to add, that there's nothing noble or altruistic or pious about this; it just feels right.
There have been ongoing concerns and criticisms from the newspaper industry that free online ad sites like Craigslist are eating them alive and drastically reducing their revenues. What's your reaction? No one in the newspaper industry seriously says that. I've spoken to a lot of publishers, editors and industry analysts. They say that our site does have a small but measurable effect on classified revenues. But they say the bigger problems are those niche-classified sites which go after the more profitable classified categories, specifically cars and jobs. There's Autotrader.com and Monster.com. Newspapers have much bigger problems. Newspapers are going after 10% to 30% profit margins for their businesses and that hurts them more than anything. A lot of things are happening on the Internet that never happened before because the Internet is a vehicle for everyone. The mass media is no longer only for the powerful, and that's a huge change for the entire newspaper and news industry.
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