- Some highlights from this interview
- The advantages of online ads
- The end of objectivity in news coverage
- His experiments in supporting journalism online
- Craigslist's economic model
Newmark is the founder of craigslist, the online community and message board that has grown to become the one of the most visited English-language sites on the Web. Craigslist's classified listings -- for jobs, items for sale and real estate -- have become a major competitor to the classified pages in print newspapers. This is an edited transcript of an interview conducted on Nov. 3, 2006.
Why did you start craigslist?
The deal is in '94 I was at Charles Schwab, and I was going around the company showing people the Net, saying, "Hey, here's how we're going to do business someday." But I also saw a lot of people helping each other out, giving each other a break. And by the time '95 rolled around, I figured I should give back a little to the community. I started a little CC list telling a few friends about arts and technology events, like the Anon Salon or Joe's Digital Diner [in San Francisco]. Nothing idealistic about it, nothing altruistic about it -- just giving back a little bit.
What happened after, though, was ... people started making suggestions as to what I could do with my little mailing list, like put job postings there, put stuff for sale. I said, "Hey, how about apartments?" And I actually did something about that. Then people had more feedback; I did something about that. To this day, how things work is people make suggestions to us, and we think about it, and then we do something about the suggestions. This is to say that I have no vision whatsoever. I do a lot of listening, and I do something about it. ...
And it's all named after you.
Mid-95, when I had to use a list server, I had to give it a name. I was going to call it San Francisco Events. It was mostly that then. People around me who were smarter than me said: "We already call it craigslist. Keep calling it that; it will keep it personal and quirky." They were right -- much smarter than me. And one effect of that is that when there's a problem, I take it personally, and that's one reason I will go after bad guys myself, as well as the whole customer service team. ...
By '99 you incorporated. At what point was it really taking off?
Well, at the end of '97, I saw that running things myself, the site was getting about a million page views a month -- not bad for back then. Microsoft Sidewalk, for example, approached me about running banner ads, although frankly I turned that down, figuring I don't need the extra money, and banner ads are frequently kind of dumb and slow the site down.
“I can see how a lot of new organizations, particularly on the Web, have deprived traditional news organizations of some real revenue. That's a real effect, and it disturbs me…”
Through '98, I tried having things run on a volunteer basis. That didn't work, and fortunately people helped get me out of denial relatively quickly. In '99 I made it into a real company, but I'm not a very good manager, and I'd hired this guy Jim Buckmaster around there, and he turns out to be a far better manager than I am. That means he's CEO now, doing a great job. I do full-time customer service as a line worker, not a manager, and that's a pretty good combination. ...
By 2000 you are going pretty great guns, things are expanding.
Which means you are taking more revenue away, in terms of classified ads, from newspapers.
Well, it's not clear because as far as we can tell a lot of the ads that are posted on our site would never have gone to newspapers. Depending on whose opinion you agree with, a lot of the ads that aren't going to newspapers are going to sites like Monster and AutoTrader.
But it's that flight of that kind of advertising to various Internet sites, not necessarily yours, that['s] beginning to make a big impact on newspapers.
I agree. ...
Why do people buy an ad or post something on craigslist instead of going through newspapers?
Well, when you're putting something online, you have the advantage of having it appear on a site almost immediately, and if you get a lot of response from that ad fast -- and we hear people get responses to ads on our site sometimes in minutes -- when you get too many responses, you want to take that ad off right away, or maybe you want to edit it right away.
So if it's online, you can do things really fast and really effectively. What's different about our site as well is that our site operates in a culture of trust. The people on our site expect other people to be trustworthy and good, and that works out really well. ...
You basically believe that people are good?
Our experience every day is that people are overwhelmingly trustworthy and good. There are bad guys out there. There are not many of them, although they make a lot of noise, so people think there are more bad guys than there are, but I see that every day. My team and I, we go after them every day. ...
Ever had to refer someone or something to law enforcement?
Yes. There are cases sometimes of small-scale scams or harassment usually where, when we hear about it, we pretty much drop everything and deal with it: getting rid of the post; sometimes warning the person who does it. Sometimes the target of the harassment or whatever brings in the cops, and we're really good at working with the cops. ... The idea is to deal with the bad guys fast, to observe the rights of the accused, and then to give the cops a break because their job is hard and not well-paid. ...
Your economic model for craigslist?
Here's the deal with what we charge for. The background, five, six years ago, I asked people: "Hey, how are we going to pay the bills? We've got to generate some revenue." People said, "Charge people who are already paying too much money for less effective advertising." And the consensus was we should charge for help-wanted ads and for real estate ads. So we charge people posting job ads in seven cities, and we post apartment brokers in New York City for apartment rental listings. ... The deal there is the apartment brokers asked us to charge them to improve the quality of those categories. That works for us; it has side benefits. For example, it helps get rid of scams or spammertizing, which is a problem throughout the Net, and it's what I spend hours on every day. ...
So you're policing your own site?
We don't monitor the site, and this is an important point: We don't monitor our site. People flag a lot of crap away, and sometimes when it's repetitive, people will send us a couple sample links, and then we'll get rid of that. But again, we do not monitor our site in any way. We rely on the community to do that, and people help us out.
Explain that. People flag things?
Something about craigslist that's unique is that the people who use the site run it. We provide the infrastructure and we provide customer support, but if you see an ad on the site that's somehow wrong, you can flag it for removal. If other people agree with you and flag it, if enough people do it, the ad is removed automatically. And while that system is flawed in some ways, it works amazingly well. ...
How big are you?
I tell people 5'7" but it's really 5'6" and a half inches. [Laughs.] We're in over 300 cities and around 35 countries, getting well over 5 billion page views per month, and increasing all the time. ...
How would you compare that to other sites?
Well, there's other sites which get far, far more traffic than we do, maybe 10 times the traffic or even more. On the other hand, typically those companies have maybe 100 times more employees than we do. So when you look at, let's say, measurements which show traffic and then how many employees there are in the company, we seem to have more than anyone. ...
Did you ever think it was going to get that big?
I've never had any clue as to our site getting bigger, growing, that kind of thing. It's nice to hear, it's nice to know, but the bottom line is there's always more customer service for me to do. ...
This is a privately held company?
Sense of your annual budget?
No, we don't talk about finance, and honestly I don't know the financials. ... We're doing well. I have everything I need right now. I have a parking place now. ...
As I understand it, 25 percent of the company is now owned by eBay?
About that, yes.
And they paid somewhere around $10 to $12 million?
We don't talk about that. Part of the reason is that, let's say, there are legal reasons we don't talk about some of those specifics.
But can we say the company you started is now worth $30 million, $40 million, $50 million? Or more?
We actually don't know, because we don't have the background, the knowledge to do [an] evaluation on a company. If you look at the blogs, say, from the VC's [venture capitalists], I've seen current estimates anywhere from $250 million to $2.4 billion. I don't believe any of it. I don't care, except it's flattering. Who cares? We're not selling. It doesn't matter.
Craigslist is worth a quarter of a billion or more?
That's what some of the blogs say. Who cares? We're not selling. It doesn't matter.
You've said you're making enough money.
Are you a primitive Christian socialist? What's going on here?
It's a lot simpler than that. I just have a reasonable sense of what matters to me, and I figure once a guy's living comfortably and maybe if you can prepare for your future, then it's more satisfying to change things. This is not that unusual in my basically nerd subculture; sometimes we're surprised that people will pay us a lot of money, which is fun. And then once you do that, it's more fun to change things. That does in fact reflect sometimes values most of us share, which includes the kind of Judeo-Christian tradition that the early Christians showed. So did the founding fathers.
That you should help each other?
Right now the biggest shared value that I can think of is that you should treat others the way you want to be treated, and just have some good sense about what matters to you.
Maybe you'd want to cash in some equity to do other things -- support investigative journalists.
Actually that [is interesting], but I'm finding that money isn't the issue. The issue is leadership and figuring out what to do with cash. ...
Do you read newspapers?
I read the San Francisco Chronicle every day, and there's this paper I hear about, [The] New York Times, which has some really good writing in it, and I read that more and more. ...
When did you realize you were really cutting into newspapers' business?
We kind of had some sense of it around '99, 2000, something like that. ... I could see that we had an effect but a relatively minor one, and that's what the newspaper industry analysts tell me; that's what publishers tell me. They said sometimes it's easier to blame someone rather than deal with problems directly, and that's hurting even more these days. ...
This whole business of news, newspapers, and all that, I realize that I'm an amateur, very much a dilettante. That's why I speak to people who know a lot more than I do: there's [blogger and director of Center for Citizen Media] Dan Gillmor, Ellen Miller at Sunlight Foundation, [media critics and bloggers] Jay Rosen and Jeff Jarvis. I talk to the folks, and then I see what they're doing, and I try to help out. ...
Explain that. Their own fault?
No. I am not blaming anyone in any manner. I just point out that there are many problems. There are many challenges facing newspapers and the whole news business these days. Paper is expensive to buy, to print, to deliver, and news organizations of many sorts are having problems with declining audience. One problem has to do with, well, failure to speak truth to power.
These days I'm frustrated -- and a lot of journalists are frustrated -- that when they see someone lying to them -- say, a politician -- they feel like they're not allowed to call the politician on that. They're not allowed to print what the politician is saying and then why it's a lie. On the other hand, that's why newsmen who do speak truth to power and who back up what they're saying, that's why they're getting more and more audience. For example, two of the most respected newsmen in the U.S. are [Comedy Central's] Jon Stewart and Stephen Colbert.
They don't consider themselves newsmen.
I agree, but even the Romans practiced satire as a means of delivering honest news. You see it in Shakespeare, the whole wise-fool thing: The jester could tell his boss bad news because he was funny and officially didn't have to be taken seriously. ...
The newsgathering infrastructure is losing its financial base, part of which is the loss of some classified revenue. Do you see how craigslist has undermined the economics of the newsgathering business?
OK. I can see how a lot of new organizations, particularly on the Web, have deprived traditional news organizations of some real revenue. That's a real effect, and it disturbs me, because I can see that people like investigative journalists have been getting fired for some years. One cause of this has to do with newspaper chains going after high profit margins. ... I feel that as a good citizen, if I want to help people do the right thing, I would bring this to light in whatever small way I can, but also I could support the people who are building new ways of funding journalism. The best example of this is Jay Rosen and newassignment.net, who is right now trying to launch his experiment where he, again, tries to find a couple of new ways to fund journalism, maybe sometimes a sponsorship or a patronage model. ...
Ever consider expanding the profits of your operation to buy a news organization?
We're not real interested in expanding the profit base. The principal reason we charge four new cities for job postings, and that was recent, was because we kept getting complaints about bad posts in those cities. Once a market gets mature, it attracts some bad guys. As far as buying a news organization -- not interested. I should mention that any interest you hear from me in terms of news and journalism is just me speaking. Craigslist is not interested in that. ...
No one ever called you up and said: "What are you doing? Are you some kind of Communist?"
We hear from the news business a lot, and it's almost always people [who] like what we're doing. That includes newspaper publishers and editors. The only flak we've gotten are from a couple papers where they've decided to abandon the separation between marketing and editorial, but that's a very, very tiny fraction of the news business. Mostly they encourage us to do what we're doing.
So no one called you and said, "You're destroying us?"
Nothing like that.
You understand the newsgathering organizations feel threatened -- not just the corporate ownership, but the newsrooms?
I speak to a lot of reporters, and I can see that they feel their jobs are in some jeopardy because of a whole host of effects: due to TV news, due to the Internet, due to a desire for high profit margins in some cases. And I think this is really serious because the most important reporting, investigative reporting, has been cut back not only because of the Internet but for the last 10 or 20 years. We need to preserve reporting jobs, and most importantly we need to preserve and strengthen investigative reporting. ...
I've been reading the novels of Carl Hiaasen for years now, and I'm kind of dense, but I can see even from fiction that investigative reporting is maybe the essence of journalism and what you need badly to preserve a democracy. That's really important. I'm fumbling around trying to help that, but there are people like Jay Rosen who are doing the heavy lifting trying to preserve that. There are the folks at the Sunlight Foundation; they're doing heavy lifting. The Center for Public Integrity, same thing.
These other organizations could be argued to have a bias, and it's mainstream media, which is supposed to be evenhanded, that's in jeopardy.
You just asked a bunch of questions together. Bias in journalism? It's there, and it's cool with me as long as the bias is honest, and when people report on stuff, they back it up; they provide evidence. And some of the organizations I'm working with have a great track record in backing stuff up.
You say you're in favor of professionalism in the news business. That means different things to different people.
One of the innovations of journalism over the last century was the idea of objectivity, and that's failed now. Dan Gillmor has a great essay on that. The idea is what we want is fairness, because the current model of objectivity means things like on TV, when you have a story, you show one person on one side and another person on the other side. That's good in theory, but there are times when ... you talk to the reporter afterward, [and] they'll admit, sure, they know that one of these guys is a liar and what he's saying is just complete nonsense, but in the current vision of objectivity, they have to give equal weight to the guy that they know is lying. That's broken. ...
Well, Jeff Jarvis is one of the people I trust for advice on media, and he, with [Upendra Shardanand] and a lot of other people, are working on a news aggregator [Daylife.com] which can help people collect news and can figure out what stories are really about, and then hopefully, as this evolves, help us find out versions of stories that are more trustworthy. ...
News aggregator is like Google aggregates a list when you do a search for stories?
Yeah. If you look at news.google.com, it brings together stories on similar subjects from a lot of different sources, and sometimes gives us a perspective on news that we wouldn't have otherwise. Daylife should do that and more.
Daylife will read them or assess them?
Well, it will take a look at what the story is about and maybe even be able to extract a few lines from the story, capturing the gist of the story.
Hopefully it's got a lead that will let the computer figure it out?
[It's] primarily computer-based, but I'm hoping that they'll be able to bring people into the equation, because sometimes you just need a human's touch on something. People are good at sniffing out when a story isn't exactly straight with people.
Is this to solve the problem that the Web is known for quantity of information but not qualitatively letting you know how good the information is?
That's part of what Daylife is about, and you're right: There's a lot of stuff on there, maybe many versions of the same story. How do we figure out what's really going on? I'm hoping Daylife starts with helping with that, and then gets better over time. ...
... Motive for this?
Well, from my perspective, it's to help people figure out what's going on in the world and to help us figure out what versions of stories are the most trustworthy. That kind of thing takes a while to get to, but Upendra is an expert on collaborative filtering, utilizing and -- forgive the cliché -- the wisdom of crowds, which running craigslist I see really does work, as long as you have some protections against panic or mob rule. ...
Wisdom of crowds? ...
Well, democracy is based on the idea that when you've got a lot of people together, making decisions together, you can get better results than often so-called experts. There's a lot of experimental psychology on this [that] shows that this really does work. The book The Wisdom of Crowds [by New Yorker writer James Surowiecki] has some of this articulated more anecdotally than scientifically. ... If this sounds like I'm talking about democracy from a political perspective, that's it. Democratic mechanisms have their flaws. The problem is that democracy works better than any other system we've found. ...
[Berkshire Hathaway chair and billionaire investor] Warren Buffett said it's not clear, if the Internet had been invented first, that we would have newspapers today.
Newspapers used to be produced using the precursor to the Internet, the printing press, and I think we're going to see a smoother evolution of papers onto the Net than a lot of people are worried about. There are some promising technologies like scrollable displays that could just be pulled out of your cell phone. I think newspapers will survive and do really well, just not on paper.
A lot of people, myself included, are excited about blogging and stuff like that, citizen journalism, but I do remind people that no matter how excited we are, there's no substitute for professional writing, no substitute for professional editing, and no substitute for professional fact checking. The problem is that with blogging, the model is publish first, maybe fact check later. In newspapers, the model is you fact check first and then publish. But those models are merging. ...
The Internet is a cacophony of voices, and over time, there are more professional voices?
Let's say that, OK, on the Net we do have news commentators and news reporters, and out of that confusion, we are beginning to see the emergence of voices who speak truth to power and who are trustworthy and who back up what they're saying. It's a slow process, but it's being accelerated as new ways of delivering news come online. There's Digg.com emerging, as is Daylife.com. We're going to see a lot more. The idea is we need help figuring out what's going on, and we need help figuring out what voices we should listen to. ...