Chicago

Craigslist History

Craig Newmark created Craigslist while working as an analyst for Charles Schwab in 1995 in San Francisco. The site was designed to inform friends about upcoming art and technology events in the Bay Area and also doubled as a modest space to post his resume.

But with the dot-com boom beginning to swell and the growing need for a centralized space for people to locate apartments and jobs, the site became a one-stop Web site for all things San Francisco.

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Now, 10 years later, it has become an international portal where people in 76 different cities in 12 countries can search locally for jobs, dates and used furniture, among other things.

Internetnews.com sat down with Craig Newmark at a recent real-estate conference held in New York City's Waldorf Astoria Hotel to talk about the site and what Newmark has planned for the future.

Q: What kind of business model did Craigslist create? Is it the same as any job listing board (with fees for listings)?

We really don't have a business model. We are a community service, and we found some years ago that we could provide a really good service to employers and recruiters.

Then we asked our community, "What is the right thing to do along these lines?" They told us to charge the people who would otherwise be paying more money for less effective advertising. And that has helped set our moral compass. We are charging recruiters and employers in San Francisco, Los Angeles and New York.

Q: How many page views and unique views does Craigslist get a month?

Our stats are out of date. We blew up our program a couple of weeks ago in the sense that our Web logs grew so big we couldn't process them all. So we figured in November we had 6.4 million unique views; and last we looked we had 1.5 million page views per month. At that point we think we were getting 750 raw hits per second at peak times.

Q:Do you have problems with spammers?

A: Not as much as we fear, but there are enough of them that they're annoying. With my name on the site, I take this kind of thing personally.

A major telecom is now knowingly harboring a rather nasty spammer, and we are trying to figure out what to do next. We may go public. We've proven pretty conclusively that the telecom hosts a service that's knowingly hosting a rather prolific spammer.

Q: Which telecom?

I probably can't say now. You'll forgive me.

Q: With eBay holding a 25 percent stake in Craigslist, do you still consider the online auctioneer a competitor?

We overlap a little bit, but we do similar good things for the community. Right now there is plenty of classified business for everyone, and we really don't think we are competing with people. There are much bigger issues for online media.

Q: What are those bigger issues?

Trust. Right now people have lost a lot of trust in the mainstream press. The best example is the White House press corps. They'll hear someone lying to them and they don't print it. The sole heroic figure is [former White House bureau chief] Helen Thomas.

Q: Is journalism something Craigslist might pursue?

We may do something along the lines of citizen journalism. We don't know what that will be yet.

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Q: We hear a lot about how Google's business model is actually built on the concept of others creating its content. The same is true for Craigslist. So would that make you a really smart aggregator?

I wouldn't put it that way. That would involve a change of mindset I'm not capable of right now. We provide a community service that helps people. Google has a very different business model, but also a very good conscience and I like them a lot.

Q: To what would you attribute the success of Craigslist?

A really good culture of trust, and we are a simple and effective site. We are kind of like a flea market, and flea markets have a social aspect, as well as a commercial aspect.

Q: Is keeping it simple something you've been conscious of from the outset in 1995?

Yes. I only know how to do things simply. We're lucky that I have no talent with Web design. Initially, we only had two links: us as we existed and the other was my resume. Then at some point it became four links plus my resume. There were events, jobs, apartments and everything else. It just grew from there. So what we have today is a direct evolution of what we had all that time ago.

Q: What lessons have you learned from the online community?

I've learned people are overwhelmingly trustworthy, and that for the most part, even the bad guys want to do the right thing. Despite my personal cynicism, I find that my values and the community's values are the same and they have to do with helping people and giving people a break, and forgive me, but stuff like the golden rule.

Q: Who are the bad guys?

Various spammers -- offshore and U.S. based. Scammers of different varieties -- Eastern Europeans, some Nigerians. We had a problem in October with fraud coming out of the White House.

Q: What type of fraud came out of the White House?

In October, The New York Times broke the story that the White House was encouraging the posting of a lot of stuff they had coming out -- the worst of which was the fake stuff from the swift boat veterans. And we just got deluged with that stuff on discussion boards. When we get nutty or fake stuff on discussion boards, people flag it and I'll have a look and get rid of it.

Q: How have you managed the growth of your site?

It was very gradual. When I saw something that needed work, I would just write some code to make it much easier. That's what we do today. We need to turn more power of our site over to the community to have people help police things for us. Like in the New York area, we have a couple of trusted volunteers who are great at dealing with misbehaving brokers, and we need to give them more power.

Q: What is the problem with New York City real-estate brokers?

They use our site. Some people think we've become the primary resource for apartments in the city. I've seen some numbers to substantiate that, and that is curiosity talking, not the main part of what we do.

Q: It has been reported recently that Craigslist is costing newspapers in the Bay Area $50 million to $60 million in advertising revenue. Do you see Craigslist competing with newspapers for ad dollars?

I don't know if I believe that about the $60 million. And again, I keep saying that there is a lot of classified business out there that newspapers could get. I'm also saying the bigger problems for the papers are trust. and a lot of change coming with the citizens' roles in related activities.

Q: How much ad revenue do the three cities, New York, Los Angeles and San Francisco, generate?

We don't disclose that, but some recent articles estimate some $7 [million] to $10 million. We don't have a problem with that estimate.

Q: You have a reputation as being active in social issues. What are some that are important to you?

I'm involved in a competition peace group that actually has a serious chance of doing something. It is made up of media people, politicians, noted religious people in Israel and Palestine. It is called OneVoice.

Q: Do political causes interest you more than business?

My commitment is in doing the right thing for my site. I don't, in my head, think of it as a business. Aside from that, I do see the Internet allows people of goodwill to change the political process, so I should do that.

Q: What is the next big thing for Craigslist?

I don't think there is a "next big thing." We are just talking about incremental improvements continuously.

Q: People have offered to buy Craigslist. Would you ever sell it?

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No. I've done well enough. The fundamental question for any human is how much money do you need to make. I've stepped away from many tens of millions of dollars. My brother thinks I'm nuts.

The number of people who use Craigslist.org is expanding at more than 100% per year -- a growth rate any venture capitalist would covet.

But the people who run the 10-year-old community Web site, which gets 8 million unique users and more than 2 billion page views per month, seem to have little interest in exploiting new sources of revenue, going public or even adding to their 18-person staff.

The bare-bones site -- a trusted resource for everything from finding roommates to selling used cars in 105 cities in 23 countries -- charges for very few classifieds, doesn't serve up traditional ads and plans no major changes to its business model.

Instead, founder Craig Newmark told Associated Press editors and writers in a bureau visit, his newest fascination is community journalism.

Newmark hopes to develop a pool of "talented amateurs" who could investigate scandals, cover politics and promote the most important and credible stories. Articles would be published on Internet sites ranging from Craigslist to individual Web logs, or blogs.

Craigslist.org gets more than 4 million classified ads and 1 million forums postings each month, and Newmark -- who no longer runs it but remains one of three board members -- is often blamed for decimating classified advertising revenue at regional newspapers. But he says he has no desire to steal readers from mainstream media.

But he believes the reason why newspapers are losing circulation is that too many traditional journalists are willing to quote politicians and business executives even if they're blatantly lying -- merely for the sake of perceived objectivity. He'd prefer an "open source" model of journalism where legions of volunteers act as writers, assignment editors, and fact checkers to challenge mainstream journalists.

"People are looking for attitude and guts in reporting -- not full-on gonzo journalism, but hey, tell us what you think," said Newmark, who described himself as having Whig values -- strong on defense, fiscally conservative, but socially liberal.

"Maybe Hunter Thompson had it right," Newmark said, referring to the late cultural icon whose rollicking, first-person narratives of drug addiction, the Hells Angels, and the 1972 presidential election shook up the media decades ago.

Newmark isn't ready to unveil any new ventures, but said he's been brainstorming with Dan Gillmor, a former technology columnist at the San Jose Mercury News and founder of Grassroots Media Inc., and Jeff Jarvis, buzzmachine.com blogger and a former critic for TV Guide and People.

Newmark hopes the ideas take shape in time to supply voters with a "trustworthy" daily political report before the 2006 midterm elections. Young people, he said, particularly need credible online news, since the Internet is the top source of news for 18- to 34-year-olds, besting second-ranked local television by a 41-to-15% margin, according to a recent Carnegie Corp. study.

Newmark still spends about half his 40-hour work week at the Craigslist headquarters, a Victorian storefront in San Francisco, filtering through e-mailed complaints of fraud and investigating potential scams. The vast majority are "bait and switch" scams and other frauds perpetrated by landlords and apartment brokers in New York, the site's largest source of rental listings after San Francisco.

Craigslist CEO Jim Buckmaster says fraudulent postings -- from Nigerian money-laundering scams to solicitations for multilevel marketing pyramids -- represent less than one-tenth of 1% of listings. But the New York section is now so rife with con artists that they may begin charging landlords to discourage illegitimate listings.

Buckmaster emphasized that eBay Inc.'s 25% stake in Craigslist hasn't changed the site's "noncommercial" bent -- and that eBay founder, billionaire Pierre Omidyar ,joined Newmark and Buckmaster on the three-person board to learn more about the online classified business, an area of intense interest not only to eBay but also to e-commerce rivals Yahoo Inc. and Google Inc.

All the revenue of Craigslist, which remains private and profitable, comes from the $25 to $75 it charges per help-wanted ad in its three top markets, San Francisco, New York, and Los Angeles.

Virtually all other advertisements and postings are free. Charging individuals for participating in the forums, or accepting money for banner ads or other commercials, would go against the site's philosophy.

Newmark, who rode public transportation to the AP office on Thursday, said he already has all the riches he needs. Still, he says, "sometimes I've winced when I thought about how much money I've walked away from."

Meeting People on Craigslist

The Internet, and Craigslist in particular, is an excellent way to meet people. Whether the purpose of meeting people is to network, find friends who share a similar interest, find romantic matches or discuss important issues there is a place on Craigslist to help you find the people you are seeking. Although Craigslist can help people to meet others in a number of ways, this article will focus exclusively on networking on Craigslist and using Craigslist to find potential romantic dates. There will also be a brief section specifying a few precautions individuals should take when interacting with others online.

Examples of Scams

1. Someone claims that craigslist will guarantee a transaction, certify a buyer/seller, OR claims that craigslist will handle or provide protection for a payment

• These claims are fraudulent, as craigslist does not have any role in any transaction.
• Scammer will often send an official looking email that appears to come from craigslist, offering a guarantee, certifying a seller, providing payment services -- all such emails are fakes!

2. distant person offers a genuine-looking (but fake) cashier's check

• you receive an email (examples below) offering to buy your item, or rent your apartment, sight unseen.
• cashier's check is offered for your sale item, as a deposit for an apartment, or for just about anything else of value.
• value of cashier's check often far exceeds your item - scammer offers to "trust" you, and asks you to wire the balance via money transfer service
• banks will often cash these fake checks AND THEN HOLD YOU RESPONSIBLE WHEN THE CHECK FAILS TO CLEAR, including criminal prosecution in some cases!
• scam often involves a 3rd party (shipping agent, business associate owing buyer money, etc)

3. Someone requests wire service payment via Western Union or MoneyGram:

• Scam "bait" items include apartments, laptops, plasma TVs, cell phones, tickets - but could be almost anything
• Often claim that an MTCN or confirmation code is needed before he can withdraw your money - this is FALSE, once you've wired money, it is GONE.
• Common countries currently include: Nigeria, Romania, United Kingdom, Ukraine, Spain, Italy, Netherlands - but could be anywhere
• Apartment listing may be local, but landlord/owner is "travelling" or "relocating" and needs you to wire money to them abroad
• Deal often seems too good to be true, price is too low, rent is below market, etc

4. distant person offers to send you a money order and then have you wire money:

• this is ALWAYS a scam, in our experience - the cashier's check is FAKE
• sometimes accompanies an offer of merchandise, sometimes not
• scammer often asks for your name, address, etc for printing on the fake check
• deal often seems too good to be true

5. distant seller suggests use of an online escrow service.

• most online escrow sites are FRAUDULENT, operated by scammers
• for more info, do a google search on "fake escrow" or "escrow fraud"

6. distant seller asks for a partial payment upfront, after which he will ship goods

• he says he trusts you with the partial payment
• he may say he has already shipped the goods
• deal often sounds too good to be true

7. foreign company offers you a job receiving payments from customers, then wiring funds

• foreign company may claim it is unable to receive payments from its customers directly
• you are typically offered a percentage of payments received
• this kind of "position" may be posted as a job, or offered to you via email