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Summary:

Craigslist began in 1995 when founder Craig Newmark started e-mailing friends and colleagues about events in the San Francisco area and thro…

Craigslist began in 1995 when founder Craig Newmark started e-mailing friends and colleagues about events in the San Francisco area and through the years has grown into a national business with classified ads in nearly every American city. The site currently has over 50 million unique monthly visitors, according to Compete. How much revenue does that translate into for a business that only charges a small fee for paid job listings? A lot, according to a report by researcher Advanced Interactive Media Group (AIM Group). In a report released today AIM Group estimates 2009 revenue should reach $100 million — 23 percent more than during 2008. We reported on the 2008 estimated numbers, also from AIM, in detail last year.

Craigslist only charges for its job listings in 18 major cities in U.S. (usually $25, but $75 in San Fransisco; the rest of the 570 total cities it operates sites in are free), and for its real-estate ads ($10 per ad) in New York City only. It also charges for its controversial adult-ads section. According to the study, New York City is its biggest market, with an estimated $17.7 million projection in 2009, and San Francisco, its hometown, is the second-biggest with $14.4 million in revenues. Recruitment ads are projected to account for $85 million of the total revs, with housing ads accounting for about $9 million, and adult ads about $4 million, according to the report.

But is that estimated $100 million in revenue for Craigslist responsible for the steep decline in newspaper classified revenue — the newspaper industry saw a falloff of 29 percent in classified revenue in 2008, according to NAA–the worst in history. It’s tough to quantify the impact its non-help-wanted ads have on newspapers since the company doesn’t charge for those ads, but one can draw conclusions from the help-wanted ads, which it does charge for. For example, Glennco Consulting Group estimates 2009 newspaper help-wanted advertising will decline about 50 percent to roughly $1 billion, which is in line with many analyst forecasts. That would mean that even if Craigslist went from $0 in 2008 revenue to $100 million in 2009 revenue on the strength of its paid job listings, it would only account for about 10 percent of the decline in newspaper help-wanted advertising during that period. What is also contributing to the erosion? A weak job environment likely has something to do with it, but other online classified sites like Monster.com, Hotjobs.com, and smaller sites like ilist.com and Kijiji.com are also likely taking a large chunk of help-wanted advertising that used to be the domain of the newspapers.

Photo Credit: Flickr/InfoMofo

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  1. Personally, I truly agree that Craigslist is a newspaper killer. Why? Because companies or clients post job listing here than to pay ads in newspaper. The only problem is that some job listing here are scams.

  2. Michael Simonsen Wednesday, June 10, 2009

    >>That would mean that even if Craigslist went from $0 in 2008 revenue to $100 million in 2009 revenue on the strength of its paid job listings, it would only account for about 10 percent of the decline in newspaper help-wanted advertising during that period.<<

    that is not at all true. CL shrunk the whole pie, it didn't just transfer dollars from newspapers to itself. CL charges $0 in 570 cities that newspapers used to charge $1B for. Even though CL made only $100mil, it (plus a few tinier vertical market alternatives, like trulia and adultfriendfinder) accounts for 100% of the decline in newspaper classifieds.

  3. Completely agree with @mike. The whole pie shrank. Advertisers, given a free alternative will undoubtedly choose free. They didn't have to transfer the money from newspapers to an online source, they simply didn't have to spend at all to get the same or better results. My only argument against faulting Craigslist for the downfall of newspaper classifieds is that if Craig Newmark, hadn't done it, somebody would have figured it out. It was inevitable.

  4. the comments seem lacking of real life experience.
    everytime i bought an ad it cost well over 100 dollars
    it was broadcast and not specific

    Re newspapers
    They felt as a monopoly that their views and opinions were everyones
    opinion. They held themselves up as the regal deciders and shapers versus
    just reporters
    so as propagandaist always do they just screwed a generation
    and suddenly a new technology left their manipulations in the dark.

  5. I used to love craigslist but now I visit http://poshlistings.com

  6. Craigslist is part of the cause of the decline in newspapers. Certainly some advertising dollar have been diverted from traditional media to the online scene. The real issue for newspapers is how people update themselves and get information now versus 20 years ago. The world changed, and newspapers and traditional media did not keep up with the changes. This is ironic, as they were presumably reporting on the changes over the years, without figuring out and analyzing the impact it would have on their business!

  7. I think Mike and Norman have nailed it between them. These things rarely have a single reason for success or failure. That being said CL has without doubt been a major contributor to the newspaper ads decline. Of course the complete apparent inability of the newspapers to see their own downfall seems incredible. Maybe some of there head honchos should be looking at the help wanted ads?

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