You state that "Even the circulation department, which takes in money from subscriptions, NEVER takes in enough for the paper to break even, thus remaining a cost center." Really? For circulation to be a cost center, wouldn't its expenses have to exceed its revenue? I'm guessing neither classified nor display ads alone permit a paper to break even (it's the combination of the three: classified, display and circulation), but that hardly makes any of them cost centers. Or am I missing something?

Craigslist is certainly impossible to beat. a competitor would have an extremely hard time getting people to place ads on their site instead of craigs list because everyone already uses craigs list and if everyone uses craigs list why post to another one where there would be fewer readers? and why go to another site to do business if no one is posting BECAUSE no one is reading it. its a cycle that cant be broken. As for newspapers going away,there is something about having a paper delivered to your doorstep that gives it a credibility that is hard to get online. so while newspapers are probably not going away, they will need to find ways to make more revanue to do their thing. how they are going to do this is a mystery to me.

You are right that no one can catch up and beat craigslit by copying them, but its possible to create a far better model for online classifieds. craigslist has a lot of flaws in its model and if we can develop a better model without those flaws then craigslist will be history and so will ebay be.

Many years ago I bought and sold cars through the newspaper. It was a brutal experience. At one point I placed a "car wanted" advertisement and finally found what I needed. In the last couple years I've bought and sold stuff through eBay. Its been a very good experience.

Craigslist and eBay provide an IMPROVED service. For one thing its 100x easier to search through their listings to find what you need. Their listing are relatively current... I can remember a time making dozens and dozens of phone calls looking for a car. Over half the sellers didn't answer the phone. There were a few wrong numbers. Several told me their cars had been sold weeks ago. In writing this I can thing on a few things a newspaper could do to improve their classified advertising, but they won't. This, you see is the way they've ALWAYS done classified advertising. Why change?

Its Thanksgiving morning in the USA. The parades are on TV. Tomorrow the Christmas shopping season starts. Today's newspapers are stuff full of inserted advertising flyers for a number of stores. The newspapars make a lot of money on these too, I would suspect. In rifling through this morning's paper, I noticed we received 6 copies if JC Penney's ad. I wonder if this means there are a few other households who didn't get any of their ads? This leads me to another interesting observaton about newspapers and advertising. If I would visit my local paper's website I would find no mention of the ads inserted in their current newspaper, none, nada. How do I find out about that insert that is missing from my paper? What if the neighbors dog makes my Sears ad unreadable? If advertising is your most important source of revenue, wouldn't you think the newspapers could provide a tiny bit of information on their current ads on their website? If you are losing business to the internet, doesn't it make sense to try to recapture some of it through your website?

If you look at the rest of the newspaper that came to my house today (or any day) you'll find it lacking in news and information. There are a lot of things that happen in my community these days and the newspaper is the last place you'd find out about them. All of the national and international news I can find on the Internet, often word for word. Again, what is the incentive for me to buy my local paper? In my case the answer is simple -- we get the weekend paper for the weekly ads and the TV listing. Suppose you ran a restaurant and your customers only came in to buy a cup of coffee and use the bathroom. How long would you stay in business?

If my hometown paper is representative of a national trend, and I suspect it is, then what is the purpose of a printed newspaper? Shouldn't our newspapers be doing things to provide a better service and attract more business? Shouldn't they be using new tools like the internet to improve their service? Looking at what the paper IS doing, I'd say they are trying to manage themselves out of existance.

One thing that Craiglist needs to address is the co-opting of this free advertising by commercial interests. I'm not anti-business at all, however for me, the lure of using Craiglist as a buyer is as a way to find a *deal* -- to, say, purchase a used car from the proverbial little old lady who only drove to Church on Sundays. But increasingly it's difficult to find that amongst the hundreds of ads posted by used car dealers who have nothing better to do than post their entire inventory on-line *every day*. For real estate and auto sales, Craiglist has gone the way that eBay has with cellphones -- I don't use it because I can't find the seller-direct bargains that I was looking for in amongst the SPAM. If they don't address this issue, then their audience will wither or, at least, change.

A minor addition--Newspapers still earn large margins on public notice announcements required by government ordinances. When internet sites lobby successfully to garner these ads, you'll see newspapers consolidate at an even more rapid rate.

I am not sure Craigslist has "location, location, location" because it does not typically rank well in the search engines - that is where location matters the most.

Most newspapers will still bring in more money from the selling price than they will from classified and display advertising combined. However, take away the money from the classifieds and the paper is completely sunk.
I suppose that's why every paper I know of is losing money left, right and centre. The net is causing a big drop in the circulations, which in turn means a drop the in ad rates, which means they can't afford to invest in better journos and product quality, which means circulation drops even further. It's an ever decreasing circle.
If you're in the newspaper game I would get out quick!

Another option, much practised over here in the UK is free newspapers.
This are dished out on tube stations, b us stations etc etc where lots of people pick them up for the commute, some are shoved thru your letter box in the early evening.
It all adds up to loads of eyeballs, I think some Swedish fella invented the idea...

Why are newspapers losing readers? Readers who then go get their stories on line?

How about - grossly inferior Product Quality at much higher prices than can be justified?

Face it: How much are you willing to pay to be lied to or treated like a witless slug?

If your age is in the sixty year range you can well remember when buying a paper was exciting, meaning never an exercise in wading through pravda-style propaganda blitzes and celebrity bullshit..

When journalism regains a backbone only then will people pay whatever cost is asked, but not to find out about Britney, or Tom, or the Hilton kids.

The profession has relied far too long on appeals to bottom-feeder mentality and bottom-feeders can find the same crap on line - free.

Dugdale why does Craigslist need location, location? Craigslist is the location. All that matters to me is that Craigslist has its own search engine. If I want a job or used computer parts, or meet someone, who normally would do that with a search engine, you go to the location that you know best. Ebay is its own location, Monster.com has its own location. The location I go to is Craigslist. Craigslist has its own loyal customers, customer numbers that will continue to grow at the expense of newspapers.

Here in the Netherlands we have a Craigslist kind of service called "Marktplaats" (marketplace). It was the first in the internet classified ads market in .nl, and still the biggest.

It's wholly owned by eBay as of a year or so ago, and I'm sure there are similar services in other countries which are too. eBay gets its just fine, and if Craigslist would be for sale...

The top 3 search guys can "cheat" by aggregating classified listings (craigslist AND the newspapers AND probably other aggregators as well), and putting them in search results for keyphrase searches for all of craigslist's categories -- and yes, for FREE. While newspapers won't touch their dying golden goose, the search guys are one tiny innovation away (or are doing overlarge steps, like Google Base). Which is better -- searching craigslist or searching 10x craigslist? People fall for the bigger numbers every time. The only real protection craigslist has is robots.txt -- which strangely seems to be enough for now.

To Fred:

This is not about selling - or buying ad-space.
This is about taking readers serious.
And the remark, earlier in the discussion abou pravda propaganda applies seamless to the Dutch press.

For others Marktplaats is owned by eBay.

Personally, I like newspapers. I find them much more readable than trying to read articles online.

I like reading the editorials because, at least in my mind, they're not like the rants in some of the blogs from some whacko that doesn't have a clue. I may not agree with them, but there's at least some rationale behind them.

Robert--have you ever used Craigslist? I lived in the Bay Area and I can tell you that all of my friends and everyone I met under 40 used it, and most used it regularly. Because so many people use it, and because so many people benefit from it, the signal to noise ratio is pretty high. It's useful, which is more than I can say for the alternatives. In SF, you not only have the daily papers (there used to be a couple, not sure if it's just one now), you also have free weeklies, plus the regional papers. None of those holds a candle to the ease of use of posting on CL, or searching on CL, and the benefit to the informality of the process and presentation. I think rather than comparing it to classified advertising, you should compare it to the bulletin boards at coffee shops and laundromats. When I was a few years younger, I used those, too--CL has the (again) informality of those systems, the randomness, the serendipity--CL is like a giant pushpin board made into a website.

Newspapers have offered a service which served us well, but they have to change with the times. What CL took advantage of was connecting people around all those minor interactions, sales, giveaways, etc. that didn't justify posting in the paper. That was the original core, yard sales and attic cleanups. I got rid of a used futon within two hours on CL, handing it off to a couple headed for Burning Man--let me tell you, *no one* is interested in used futons, but that's the whole point: *somebody* is, but neither am I going to spend money to advertise in the paper for something I will likely not even be able to give away, and neither is anyone scouring the paper looking for used futons. CL let's people like us connect with each other for free, without getting in the way, without asking us to sign up for anything. If newspapers offered something that convenient, of course we'd use it. Remember as well that CL used to be SF-only, then Bay Area only, and in all that time newspapers haven't come up with an alternative that was compelling. I live in Berlin now, and CL is still unknown--so what are the others doing in the meantime? I've yet to discover it. Seems like it is/was their game to lose. Patrick

What seems obvious to me is that Craigslist must be bought by one of its competitors if for no other reason than to shut it down and preserve their business model.

I used to print your column to read at my leisure.Now I cannot print it properly. Is this to annoy subscribers?
Jim

To combat Craigslist's selective charging, Yahoo could have selective free ads, for - I don't know - broker apartment listings in New York City and employment ads in only seven cities. But that would be nasty.

Cost centre doesn't mean what think it means. Advertising and Subscription departments must either be profit or revenue centres, since they generate funds. A profit centre which loses money is still a profit centre. Cost centres, in contrast, only spend money. Breaking even has nothing to do with the classification.

Speaking of Craigslist and newspapers, a line from an article in the November 2006 issue of Fast Company asks "When Craigslist offers free online classified ads and Google and Yahoo link to breaking news, what's the role of a newspaper exactly? What do you do when your core product is, literally, yesterday's news?" (Fast Company, Nov 2006, "Hyperlocal Hero", pp. 94-102)

The article reports on the activities of Rob Curley, who is resusitating local newspaper divisions by concentrating on extremely local "news" that national news web sites don't cover, and putting it all onto the web. High school stats on steroids, very detailed restaurant guides with reader comments, a drought database for a Kansas newspaper, podcasts for high school sports, online video-based beach guides, online video of first-person roller coaster rides from the local amusement park, etc etc. "We can't out-CNN CNN. But we can make sure no one out-Naples us" he says in the article. Anyway, Mr. Cringely, it was a good companion piece to read along with your column.

The one minus I have found on Craigslist is that there are SO MANY items being sold nowadays in the larger cities (I live in Austin) that it's hard sometimes for one's particular Craigslist posting to get noticed. Some way of differentiating things better would be useful, but I presume that having Craigslisters PAY for preferential displays would be against the spirit of Craigslist. THAT'S one of the reasons to use eBay over Craigslist... I can pay extra to get it shoved into your "eyeballs" in flashing neon fonts.

That last comment is right on. If you are a PC tech support guy advertising in Computer Services on Craigslist, as I am, you have a problem - 150 other people advertising in the same place. And Craigslist will ban you if you try to place your ad more than once within 48 hours. Nonetheless if you look at that ad space, you WILL see people posting multiple times (but in different suburbs) and somehow they manage to survive. Ad space on Craigslist is extremely Darwinian - either you make your ad better than anyone else's, or the odds of you being picked by a customer are 150-to-1. I suppose that isn't much different from any other ad location - but usually in a newspaper you don't see that many ads for one service. It's more like the Yellow Pages where you do see many ads - and the biggest and best designed ad usually wins.

> There is no fair way to compete with free

It's not actually true. I've used Craigslist on occasion this summer, and it was a painful experience. Yes, it's free, but I'd better pay for the service, rather than go to google maps to check how far the seller is located from me.

So is google eating its own tail? Are we saying that newspapers will go flop and then there won't be any news on the net anymore? Or are they just disintermediating and AP and UPI will step in? I'm too ignorant of how all this works, I am not sure whether AP employs any reporters or is just a consortium of newspapers.

I guess the question in either case is how will the reporters get paid? If google wants those eyeballs bad enough, I guess they will pay.

I have an urge to say something cynical about the old-fashioned journalism we're getting nostalgic about here. The few news items I've witnessed were shoddily covered. Newspapers often seem to me to be stuffed with trivia. If the web disappeared I'm not sure I'd be reading the paper much more than I do, which is not much. TV is better for breaking news (though has its own bias toward the dramatic/visual). Depth and meaning?

I use dotso.com for reading my news online. It's nothing to get overly excited about, but I find it's super fast and saves me time online. My 2 cents.

Craigslist is extremely useful. I sold my house via it, and every car I've traded in the past few years. If anything "kills" craigslist, it's going to be the spammers...everyone from private individuals who, against the terms of service, place long strings of "keywords" in the ads (newsflash: some dude looking for a Volvo whatever could give a rat's behind about your Civic with the bean-can silencer) to dealers who pose as private individuals to the same people who try to spam logs like this.

It's very hard to monetize the online world. Some--but not many--people will pay for a site subscription, and ads don't cut it unless you're Google. News is going to be very hard to figure out...though I think people will pay for accuracy and quality. Whether enough to support staffs of hundreds of reporters and buildings full of printing presses is another story.

There is no question about it the erosion of classifieds will hurt mainstream newspapers very badly. I wonder however if a recent comment made by Mark Halperin adds another nail on the coffin of this equation. As the political director of ABC news he made a comment about the mainstream media when he said (speaking as a member) that they have lost the confidence of half the country speaking of the more conservative half. He was of course speaking of the way politics is covered. Craigslist cuts deep and starts the bleeding but when the day is done, and we look at who has survived there may be more to it that the classifieds. Even in reading a story about finance or technology or politics when I find myself wanting to fact check a story in the newspaper by going on line, I know thats going to be a problem.

Craigslist is a lot like old text-based bulletin board systems from the pre-public-internet days. It is a better alternative to the meatspace idiom it substitutes for, but by no means is it so good that a well crafted compeitive for-profit service could not beat it in the marketplace.

Craiglist is not exceptionally user friendly. It does little to hyperlink within itself, creating chains of valuable clicks. It does not have a reputation system. It does not facilitate payments or escrow. Its search tools are rudimentary, and as no user profiles are maintained, the users must re-enter search criteria anew with each visit.

I think that Google could probably nail Craigslist to the wall if they wanted to.

Craigslist is not practical in our rural area. The nearest metropolitan Craigslist "zone" is 150 miles distant.

Seems like Craigslist encourages face-to-face seller & buyer encounters to minimize fraud. Besides, one can't Fed-Ex or UPS a car or refrigerator.

Our village newspaper or the supermarket's free bulletin board will survive a bit longer.

There was an interesting post in the Freakonomics blog, saying that newspaper circulation decline was partly their own doing. They are slowly cutting back their cheap or free copies and vanity circulation, which used to be useful in padding the numbers. Hence the newspaper may not be in such a terrible shape after all.

http://www.freakonomics.com/blog/2006/10/31/newspaper-circulation-drops-not-so-bad/

Since it's Thanksgiving, I'd like to express thanks to Big Bob for his column. Since completing an MBA almost 16 years ago, a lot of the economic models have changed, and he gives me a lot of good insight into what the heck is going on in the markets these days. He's also much more entertaining than the newspapers.

A few numbers:
Revenue for "The News Media Group" (NY Times, International Herald Tribune, the Boston Globe, the Worcester Telegram & Gazette, 15 other regional newspapers, and a few radio stations (with negligible revenue) ):
Advertizing: 66%
Circulation: 27%
Other: 7%

Garnett Compagny (largest U.S. newspaper publisher as measured by total daily circulation: US Today, USA Weekend, many other newspapers, televisions...)
Newspaper publishing revenues:
advertising: 75%
Circulation: 18%
Other: 7%

Source: SEC fillings

"It can't be done without cheating," so that's what someone will try. Litigation, perhaps over IP. Watch for it. The business and legal world are full of slime.

"Cannot be beaten, without cheating..." What about the threat to open access? Craig's list operates with such low overhead because of open access. If the FCC changes the rules then moneyed interests could certainly threaten the success of Craig's list. And this would indeed be cheating.

Here's to new congress. Let's keep after them!

Craiglist grows by word of mouth. I’ve used it to give away free items, job hunt, look for organizations and rent a room. If I have been disappointed in my dealings it was with the person, not the forum. It is the one place where the ‘small town’ feeling still exists.



It is also a great place to ‘mine’ for information and to get a sense of what’s important in various communities as well as fodder for articles.

Craiglist is hit and miss sometimes but since it’s free it’s not as painful as paying for an ad that doesn’t produce.

The negative part of craiglist is the scams that occur. For instance, in renting a room I’ve received the same type of form letter from people in various European countries all using the same language telling me they want to rent my room, and they want to pay for it in advance …. All poorly written, all total crap. I usually respond by informing the writer I am forwarding the email to the local police so it can be tracked back to them.


So, the good, the bad and the ugly. It’s like home.

Craigslist: Threat to Democracy?

If you agree with this analysis, and in particular the point that newspapers can't compete with CL for ad revenue, then does it make sense to conclude that CL threatens the existence of newspapers across the country, and therefore our access to news?

Newspapers are one of our best sources of information telling us what our govenment is doing, whether we read their articles on dead tress or computer screens (they're the same articles). So there's a disconnect between the services newspapers provide and how they make money. We don't actually pay newspapers for news. Maybe this is as it should be; after all, information yearns to be free.

If newspapers go under due to lack of advertising revenue, who will produce the news stories that actually inform us? Will we be left with TV news, which is far inferior (IMO)? Or would CL have to start funding news departments, which I think unlikely, not to mention expensive (enough so that they'd probably have to start charging for more ads).

"Roy" hits the nail on the head, but there is more to it than that... Not only does Craigslist not serve more rural areas, it doesn't do all that well in some urban areas as well.

Virginia Beach is the largest city in Virginia (with Norfolk right next door). While they aren't as large as the combined cities of Northern Virginia up around DC, Hampton Roads (Norfolk, VB, Chesapeake, Hampton, Newport News, etc) is still a pretty signficant suburban population... and yet the Craigslist content for Hampton Roads is spotty. On the surface, it looks "busy" but it really isn't. The number of ads is fairly thin, and you usually don't find what you're looking for. You're better off picking up the local classified mini-paper, the "Tidewater Trading Post".

The thing is, the local newspapers could totally get their crap together by offering more of their classified content online. The Virginia Pilot does this, but it's not easily searchable or particularly user friendly. If they were to improve their system so that website users could find the classified content easier, they could completely beat Craigslist, even with for-pay ads.

The Craigslist rental ads drive me crazy. As a potential renter now and again, I find the ads in the newspaper classifieds are priced much more reasonably.

Personally, I would price my rental more reasonably if I was paying $150 for a 1 week run in the classifieds. On Craigslist there's much less of a penalty for mis-pricing. So you can speculatively try a few over-priced ads for a month or two for free!

I think the quality of the content on Craigslist would be much higher if every ad cost $0.25 - $5. My secret hope is that CL is just trying to corner the market before they foist something like that on us. $5 per ad would still be way cheaper than newspaper classifieds, and the potential buyers would no longer have to wade through so much speculative garbage (on the part of the sellers). CL still brings a lot of value beyond the fact that they are free. They have nailed the UI.

Robert X. Cringely makes an excellent point that you can never compete with free. The sellers love "free". But "free" comes at a cost to the buyers. So many ads are garbage! So using CL takes more time than it should for potential buyers - there's so much garbage to discard. (UI note: classifieds also don't require the "drill-down" click. Sellers love this because they can write 3000 word essays about their product, but it slows down the buyers).

I guess one could argue that CL ads are priced properly, and that newspaper classifieds are actually under-priced. Maybe the demographic using newspaper classifieds are older/out-of-touch and don't realize what they should charge. But I find my argument that there is little incentive to price properly on CL more compelling. And it suits my bias right now as a buyer. If I were a seller I'd definitely use CL. But as a buyer I'm sticking to the classifieds.

The local papers have THE worst online classified ads. It's not the content, it IS the programming and navigation which is awful, terrible, and pathetic. As one who pays hundreds each month for classified listings, I'm surprised how clueless the newspapers are. All I know is every year our classified rates continue to go up and the circulation continues to fall.

Every few years you come out with a prediction that doesn't make any sense.

I seem to recall you predicting some time back in 2002 (?) that if everyone sold their junk on eBay, it would pull the US out of it's recession.

If Craigslist was a threat to newspapers, then the local free trader rags you find in the grocery stores would have killed papers long ago.

Long live newspapers. In my own unofficial studies, the money I save from reading the local ads saves me easily double the cost of the subscription rate. Besides, I need something to add bulk to my recycle can....

I never believe the "no matter how much money" line. Microsoft, Yahoo, eBay, Google -- Any of them could afford to offer Craig $50M or $100M or $250M whatever it takes to make him a "partner" (slash slave) if they thought he was dangerous.

I think everybody short of a billionaire has a price they won't turn down; especially if he were promised certain types of ads would remain free, etc. to salve his social conscience for selling out.

Why would they buy it? To shape and direct it into a club they can bash thier competitors with, of course. Would Craig care? I don't know; but in his place, I probably wouldn't. There are a lot of things I could do to serve society with $250M and no CraigsList than I could do with just CraigsList. And like I said; a few promises in place preserves most of the efficacy of CraigsList anyway...

I once heard Craig Newmark speak at an event and I talked with him briefly afterwards. That, combined with what I have read about him, leads me to believe that he is the last person on earth who would ever sell out, not for $500m, $2b, whatever. If it was his goal, he could easily become a billionaire, but that simply is not what he cares about. He is a thoughtful, socialist geek (and I mean that in a an entirely non-judgemental way) who loves what Craigslist stands for and who isn't driven by the profit motive. Full stop.

I agree with Ben. Not everyone is driven by money. I'd be more than wealthy enough with $5 million. Ten or a hundred times as much is superfluous.

My financial goal is $5 million. To me, once that goal is reached, there is no advantage to more money. I could live quite well on the returns of half that amount; the returns on the rest would let me make meaningful contributions to various causes, worthwhile endeavors, and selected charities. Finally, when I'm no longer here, my will can distribute my assets where I think they will do the most good.

I do not agree that you cannot compete with free without cheating. People will always gravitate towards things that offer premium service and status and percieved quality, such as bottled water.

You can compete with free by offering revenue sharing & affiliate models for bringing in more business, for connecting people.

You can also offer exclusives to bring in people, and create a higher quality service with less clutter which saves people time, which is why eBay has continued to raise it's rates each year and continued to succeed, it's now less like a flea market with 60% worthless items and more like a discount warehouse with an infinite storage room, the quality bubbles to the top.

There will always be a place for free, but this does not kill the competitors, they simply have to be creative.

So then. Why did icq died ?
There was a time when everybody was on icq. Now it's on yahoo messenger.
How did yahoo managed to steal all the mass of people that was on icq ?

I've read this argument lots of times and only just realised why I'm always saying "Meh" at the end.

This is a local problem specific to the US and some other (globally quite unusual) locations where the majority of newspapers overtly serve a small geographical area. Countries where all the population is in only one time zone tend to have national newspapers. And most of them don't carry classifieds at all.

I'll bet USA Today isn't worrying about Craig. The UK's national papers aren't suffering from Craigslist, though the local evening papers might. In Ireland they're far more concerned about Daft.ie, which has become the one place for real estate listings, chewing real revenue from the newspapers.

The Guardian depends heavily on display ads, and a hefty chunk of that is in recruitment. They're not, however, going to be blown away by online job sites because of the way The Guardian has set itself up. Monday is Media Guardian day, where the second section carries meeja industry news and 32-ish pages of media jobs. The Guardian on Monday has the reputation of being the place to go for those job listings - serious recruiters never miss it. On Tuesday they do it again for education, Wednesday for the public sector.

My point, I suppose, is that if US papers have to think of a new way of making ad revenue because local classifieds are drying up -- then there's no need to panic because all they need to do is take a trip overseas and buy a couple of the rags while there. This is, for the most part, a solved problem in other places.

(And no, an online version of the Guardian's media section has thus far entirely failed to appear - it offers nothing over and above the current experience to warrant an audience shift. If I'm looking for a radio job, the last thing I want is for the ads to be free to advertisers. That's nothing more than a fast way to drown out the one I want to see with hundreds of amateur voluntary-position nonsense ads.)

Quite a handful of companies were willing to shell out $350 for a job listing at Google's top result for "Joel". Here's his explanation, it remains to be seen how this will work long run: http://www.joelonsoftware.com/items/2006/09/05b.html

Spam is free. I have never met a person that has ever purchased anything from a spam email.
How does it survive?
Perhaps they live and work in a storage unit and read newspapers.

Here's to Craigslist, may it wave forever. I'm 46, old enough to have my entire formative period occur prior to the ubiquity of the internet, and almost never used newspapers for anything, not news, not buying, not selling. Never subscribed to one, and only very rarely purchased one off a newsstand, finding it hard to justify throwing away all that paper just on the off chance someone might be selling something I want. The few times I did place classified ads, there was thin response, and when I would call about something, it was as often as not already gone, as the idiot paper would keep running the ad and the person would neglect to cancel it. Both Ebay and CL are time-decaying, in that listings either finish or drop off the bottom.

Before the advent of Ebay and CL it simply wasn't in my consciousness that any unwanted thing could maybe find a home with someone else, or if I wanted some uncommon, offbeat thing I might be able to actually find it. I once sold a Wascomat laundromat-type washing machine on Ebay to a guy who drove a crummy old van and trailer from Illinois to NC to get it, after trying unsuccessfully to sell it through the local classified rag for *months*. Got paid well for it, too. The things I've listed on Craigslist have often had response within hours, once within minutes. Some got no response at all- oh well, there's serendipity for you. Try again later, or reexamine my price.

What I like about Craigslist is it's humanness. It's just people doing what they want without interference. Ebay has that to a lesser extent, but the registration/nanny/profiteering aspect of it takes away somewhat. Ebay qualifies as an 'evil corporation' where CL doesn't, which is entirely to be laid at the feet of Craig himself. His stance on refusing to sell out or moneyify (if that's a word) CL stands out in my mind as one of the noblest examples that can be made. If anyone ever does manage to subvert CL, it will be a tremendous loss to the great number of people who just want to live and connect without being treated like cash cows.

Yes, but I smell a rat. What if Yahoo and its unlikely bedfellows have a secret plan to smother Craigslist with or in their embrace, and that is exactly why they made their deal?

That's just it though.

How do you wrest the users of Craigslist away from Craigslist and to something else?

It's free. The only way you cn undercut that deal is PAY people to buy stuff from your class-ad site. That defeats the whole "profit center" nature of your class-ad operation, because now the money's going the other way.

It works. Craigslist is about as un-sexy and un-assuming a service as you'll find. It looks and feels like a classified ad section, and for the most part that's exactly what it is. There are no fancy banners or "featured products" at the top of every page, just the latest ads on whatever topic you've chosen (and filtered via search criteria). Again, it's going to cost you to dress it up, and if you try and offset the cost by throwing banners or adwords on it, folks are going to go back to the bare-bones version because, again, it's there already and it doesn't bug you with that 'crap'.

I don't think there's any feasable way to muscle Craigslist out of the Craigslist business, short of buying the company that connects them to the Internet and then throttling their network pipe to nothing.... and to do that would be dirty pool.

There IS a way for the competitors to throttle craigslist - by using the law. If the politicians or the courts impose liability on Craigslist for the content of its user's ads, CL will have to hire a lot of screeners, and it will have to pay those screeners, which means charging for a lot more of its postings beyond NY real estate and jobs. Even enough plaintiffs bringing losing cases that cost CL a lot of legal fees will be enough to do this. If you read the news, this effort has already started. If Yahoo, Google, and Ebay start backing stricter liability for user generated content, you will know why.

"FREE has a mystique that is hard to fight. That makes Craigslist Linux to eBay's Windows."

That begs one comment and one question.

Question first: if Craigslist is Linux and eBay's Windows, where does Macintosh fit into the analogy? Point being, there's room for many business classifieds/selling models.

My comment parallels those made by others here. I use both eBay and Craigslist effectively. Although I despise eBay and respect Craigslist, they provide some overlap, but their services are both uniquely useful.

My local paper had a very successful model. Classified ads for items under $5 were free. The price went up in ranges from there. They were so overwhelmed with ads that they had to rejigger the whole paper layout to fit them all in. And stuff would move too. I sold lots of items for under $100 that just wouldn’t’ be worth posting at regular Classified rates. My large sales moved quickly too as the cheap ads brought eyeballs. A new publisher came in and couldn’t stand to see anything given away for free. Now the classifieds are about 2-3 columns long. I think if a Craig’s list competitor could make ranged pricing of ads work; CL would fold in a year.

On a related topic, it is abundantly clear that newspapers (and new magazines) don’t get the Internet. The hideous, cluttered design of nearly every newspaper and magazine website is proof enough. Why are they all sooooo bad?

An answer for Matthew.

Of course there is a spot for a boutique (Apple) classified service. It would most likely be something were you paid a fee and got a lot of hand holding, possibly even an "add professional" to actually design and word your add.

Taking this one step farther, such a service could exist today on top of Craigslist. It would be similar to the Ebay Boutiques that have sprung up nationwide where you can bring your stuff to someone else and have them sell it on ebay, and then cut you a check for your share.

A similar service on top of Craigslist could easily be created and probably already exists.

Have to agree with the other UK comments. Craigslist just hasn't seem to have any impact here. It's not something most people know about. Just taking a quick look at my area:

http://cambridge.craigslist.org/

It's hardly what I'd call 'busy'.

I don't think my local newspapers are exactly scared.

I hate to break it to you, but there's a massive problem with Craigslist. "Free" advertising means that the place is inundated with junk and fake advertisements. Since you don't have to give up anything of value to post there, loads of people post all sorts of scams and spam.

I think it would be a far better service if there were a SMALL fee even for the 'free' sections. 5-10 cents or so, enough to keep the spammers away.

I don’t believe Google had to buy it’s way to the table when it came to YouTube, and that it could never catch up with a product of their own. I’d be more likely to believe with all the money they have it was the easier way in, not the only way in. I say this because Google already did what you are saying is impossible, and they did it with their search engine. They were very late to that party and managed to come out on top… throwing around the words impossible and never seems to be very short sighted.

And with that in mind, you can compete with free and win, the mind set of us Americans is a bit warped and we believe that if you pay for something it MUST be better, which isn’t necessarily true, but we the overwhelming majority believes this and will pony up the greenbacks if it suits their needs. All that has to be done is to create a ‘better’ Craigslist that resonates with people and they will pay for it as long as a healthy percentage of people gravitate to that site. And that is always the key. It never matters what the better product is or the cheaper product, it always comes down to what is the more universally accepted product/standard. VHS or Beta, Ipod or Zune, HD or Blu-ray sometimes the market can bear multiple products other times it can’t.

When it comes to technology people are willing to pay to make the experience easy and understandable, if you can make it easier for John Q. then he will pay. Saying you can’t compete with free (especially when it comes to computers) is just being blind to what is out there.

You are spot on. Craiglist provokes the innovators dilemma for many. Smart local dailies will push content and journalism to create community. Job postings and ads for used cars were an anomaly in the economic food chain.

Great article.

I'd sold more of my crap on Craigslist, foregoing the local newspaper.

This business model works - if it didn't why would so many people want the proverbial "seat at the table".

For those of you who whine that free must be junk, please fill my checking account with your disposable income.

I think the most important feature of craigslist is simplicity of placing and seeking an advertisement. Compared to calling your paper and dictating your ads over the phone and then paying a ridiculous amount for it. As a seeker, having to pore through the page and highlight parts of it...

Free is a good carrot, but would craigslist have succeeded had it been difficult to use?

One of the shocking things you realise when you first use the web is just how little newspapers actually write themselves. Entire articles, often attributed to their own reporters, often on the front page, are frequently taken verbatim from press agency wires.

If Google subscribes to these wires as their news source, they'd be simply cutting out the middle man most of the time.

Great article. I have watched the SF Chronicle slowly go downhill, and talking to folks in the know, a lot of it is because they are losing revenue hand over fist to Craigslist. Everyone thinks its the Internet news and bloggers that are choking traditional newspapers, but I agree, it's really the sucking sound of revenue being pulled out of their lucrative classifieds business. I don't think that was Craig's intention, but that's certainly what's happening. I found it fascinating to see how this same challenge also applies to Internet businesses at eBay, very good points!

I think you are missing one critical piece of the craigslist/ebay conflict. Ebay drove people to craigslist with their pricing practices. In the beginning ebay had the big market with all the buyers. It had plenty of sellers who were willing to pay the (small) fee to list their items. Then Ebay got greedy. For instance, instead of 4 free pictures it became 1 free and (only) 15 cents for each additional picture. The add-ons began to nickel and dime you to death. In each case it wasn't a huge amount but it really irritated a lot of people. People just saw it as greed, plain and simple, and jumped at the chance to see if craigslist was an option. The Linnux vs Windows argument holds here. Craigslist became the "anywhere but Ebay" place to be.Other arguments would include their slowness to police the prevalent fraud on Ebay and ineffective feedback mechanism. Craigslist eliminates both by putting the buyer and seller face to face.

There other benefits to craigslist. It seems the people on Craigslist are smarter (or more involved) than those still viewing the old classifieds. A potential inflammatory comment only supported by my personal experience.

Help wanted advertisments were posted in Craigslist, CareerBuilder and the normal newspaper classifieds. It was obvious the respondents to the Craiglist posting were the only ones who actually read the posting and responded appropriately. The other responses were either automated or generic boilerplate. The end result was, free+good response = winner, expensive + bad result = loser. The same has held true for my buying experiences with eBay vs Craigslist.

Yes, you can compete with free in the classifieds market (or any advertising market), if you are willing to go one better than free -- enable people to sell their mindshare.

That's what I am doing at MyMindshare.com (http://mymindshare.com).

typical writer, and that is why he is a writer. A pompous as with a pen.

According to his thought, the home/heating system put a lot of 'wood' out of work. The horse and buggy was put out of business by the car.

If this loser was in charge the world would not be a better place.

Writers - so comforting to know these pricks will never run anything but their mouths. Pompous liberal weenies that whine for a living.

Hope you never have to get a real job.

go lefties.

gene wiley

RE: response to Gene Wiley. Some people can see the negative in everything, and you've defined that in stellar fashion.

You can compete with free, but not in this arena. Cable TV vs broadcast, satellite radio vs broadcast, Tivo vs a DVR - just to name a few examples. Unfortunately for newspapers, the internet has some huge advantages - the ability to search thousands of listings quickly, the ability to handle everything without talking to a person (ease of use), and the cost advantage of bandwidth vs paper.

My only concern is that if papers have to begin selling based on their content, the "news" will get dumbed down to it's most attractive form. Get ready for more celebrity entertainment to sell papers.

OK I have to state straight up that I haven't read all 73 comments, so someone else may have already brought this up: When journalist types, of which I am one, lament craigslist, they always seem to gloss right over the fact the newspaper business basically brought this on itself. Classified ads were set at monopoly pricing because they could, and like any bloated monopoly that doesn't see change coming, basically got caught with pants around ankles. Newspapers have no god-given right to rake in advertising dough, and if they can't figure out a way to make it work, oh well. The market will adapt.

The other thing that never gets mentioned is that for all the hand-wringing, newspapers are still pulling down profits that would make your corner grocer do cartwheels.

Check out eBay's free kijiji.com

I don't think the author is bemoaning the fact, just spotting trends and sharing a little insight into how the internet gets built up.

Now if Grand Rapids would just get on craigslist maybe we could kill the right wing rag that dominates all discussions here.

I wonder if any real live newspapers have read this column and the reader comments that have followed it? There is a lot of great information here that is probably going unnoticed by the people who need it the most.

In almost any line of business price and quality sells products and services. More accurately stated -- high price or poor quality can kill a business. In the comments that have been submitted we've seen some wonderful observations about the lower editorial quality of the print newspapers and the poor service they are providing with their most important source of revenue -- advertising. I don't think Craigslist, eBay, and the Internet are putting newspapers out of business. I think the newspapers are putting themselves out of business. Now that there are alternatives to newspapers, the market now has choices.

Newspapers take notice.

There is a MUCH better way to manage advertising in your newspaper. Start with a web enabled application that will allow your clients to place their own ads. For classified ads you will need a form entry tool. For business ads the application can take print ready material in PDF form. Your clients can start by getting a user id and signing onto your ad placement system. They request the ad and pay for it by credit card. (The credit card is part of the client identification process to insure you are you.) If someone is not Internet savoy, they can call your newspaper and someone can manually key it into the same application for them. Call-in ads should cost more than client placed ads (to cover your labor costs). All clients and advertisements are managed by a simple database application. When the client sells something (like a house or car) they can return to the web application and remove the listing. Each day the newspaper will run a database job that will list all the current and valid advertisements and typeset them automatically. That takes care of the print half, now the internet part. ALL advertisements (both business and classified) should be indexed by a good search engine. It should be easy to find a car, or whatever. (I want a used Honda or Toyota that costs less than $7000 sorted by mileage.) You get the idea... If you keep the ads cheap and make the web application mind numbingly simple to use, it will attract lots of new business.

Web Applications like this are easy to implement. This is a very well understood application design. It won't cost a lot to implement. Heck, I'd bet there are a dozen readers who'd be willing start an open source project tomorrow to create such an application. This is a low cost, low risk suggestion to enhance a newspapers ability to raise income. The only reason a paper wouldn't implement a suggestion like this is their own stubborness. Do you blame Craigslist, eBay, or the Internet for this?

s/Craigslist/Napster/g

s/Newspapers/Record Labels/g

s/2006/1999/

The Record Labels are outmoded and can't compete with Napster. The new revolution is here.

Ted: you missed

s/legal/illegal/g

This column is mostly correct. However, there are a couple of minor corrections. Firstly, newspapers in the USA are on a *tiny* scale. The paper for which I used to work brought in the equivalent of around 1.5 million US dollars per day from the cover price alone, in addition to advertising revenue. Secondly, it's not really true to say that Google bought a superior platform. Google Video was *already* a superior platform to YouTube at the time of the purchase. The only thing I can see that it was lacking was eyeballs.

You are wrong, ebay competes with Craigslist, just have a look at http://www.kijiji.com , which is their answer. At least in Germany (see http://www.ebay.de) they promote that service on bottom of their starting page.

The premise is eBay competes with newspaper classified advertising, as does CraigsList. eBay Motors is a tremendous service in the USA.

For a fuller explanation of how this is affecting the media, check out Alan Rusbridger, Editor of the London Guardian giving this lecture about Craigslist's impact on American newspaper revenues:
http://www.rsa.org.uk/events/textdetail.asp?ReadID=714

With the new blog format, your writing has become a little too blogish. This article doesn't tell us anything new. It is purely commentary. Sad.

All I want for Christmas is a new season of Nerd TV ... but seriously

It's interesting that Google Answers is being discontinued. Sure the quality of the answers was better, but the site wasn't on the Google page or easy to find and despite the name your price tier ($2.00-$500.00) you arguably can't compete with free, like YahooAnswers, as long as the service is adequate.

In the UK certainly the most widely used equivalent of craigslist that I know of is gumtree. I don't think that craigslist will catch up to gumtree in popularity - in London at least.

There are probably others in other countries that have grown under the radar as well. Although craiglist may be dominant in the US these other established sites such as gumtree will prevent CL from becoming a globally dominant field leader such as youtube.

If the daily newspaper dies, then the question really becomes, How will print journalism survive, because who will pay the the journalists bills? I think there is two path here.

1. Not many people will become journalist because there is not a job market. A handful of large media companies employ *all* the professional journalists in the world.
2. Some company (Google, Yahoo, or any online company that aggregate content) will develop a kickback model in which the author of content will receive royalty generated through online ads. This will have the polar opposite effect of scenario #1. Journalists will become truly independent from media companies. There will be many more journalists. News media companies will become irrelevant.

I prefer scenario 2.

"Even the circulation department, which takes in money from subscriptions, NEVER takes in enough for the paper to break even, thus remaining a cost center."

This isn't the definition of a cost center. Under this definition a paper that loses money overall comprises only cost centers.

I see the future of news to be completely customized--a Create Your Own Newspaper. Pick from a list of columnists you want, an editorial board you like, a few sport teams and comics. Have a few css options to accomodate various preferences. Have a few non-invasive (and targeted ads) which go directly to the chosen content.

News readers kind of do this already, but if was packaged in a nice layout and paid the writers directly for the content, it could be taken to another level.

Danger!
DANGER!
DANGER! WARNING Will Robinson!

Does not compute!

I disagree that craigslist has already won the game. Maybe in isolated markets (SF, NY, etc) but I live in a top 25 rust belt city and the results are about as good as those free weekly mailers. "you want to buy that car? It's been sold for two weeks" "oh, you want to rent space for your trailer? I'm not sure how much that would cost I'll have to call you back." to which you never receive a response.

My experience is if a potential seller doesn't want to pay to list their wares, they are likely not highly motivated sellers, and as such are a waste of my time.

Hmm, I dunno. Based on a couple minutes of thinking, I'd say that all Google has to do to beat Craigslist is help me find a job/house/whatever better than Craigslist can. Google has my search history, email, photos, videos and a place on many pages I read, and now likely on some radio stations. I've visited Craigslist out of interest only. Craigslist is on Craigslist, Google is everywhere else.

I find the negative comments about craigslist pretty odd. It's not a panacea, but it works well enough. When the Seattle list was new, it had few listings, and now it's quite busy. Everyone I know sells everything via it. My parents bought a car via it, and sold their old one. I have sold eight cars via it, and bought five. I've found kitchen stuff, household goods, you name it.

Sure there's some crap, but you're telling me the newspaper is better? In ye olde days, I would say 7 out of every ten ads were already gone. I love it because publications like the auto-trader and Hemmings used to go to a small group of 'elites' before they made it to the great unwashed...now craigslist has leveled the field a bit.

Plus, they have RSS feeds on every search! If you cannot see the advantage of that, you're truly neolithic.