When you look at the disruptive Internet companies, those that have changed the way that people do business, the first ones that jump to mind are giants like eBay, Google, Yahoo, Monster and Travelocity. These companies are all generating huge revenues and have transformed their industries.
But one of the most disruptive Internet companies of the past few years is one whose revenues are barely a fraction of those: Craigslist. In just a few short years, Craigslist has dramatically changed the way that people buy local products and services, find jobs, apartments or even dates, despite revenues estimated in the low eight figures.
Not long ago, classified advertising was the cash cow of the newspaper industry. Whether you were looking for a job, an apartment or a used car, the newspaper was the first place most would turn. When’s the last time you turned to a newspaper classified for anything?
While it’s hard to pull out classified revenues from newspaper financials, one San Francisco Chronicle survey done in late 2004 estimated that Craigslist had cost Bay Area newspapers more than $50M per year in recruitment ads alone. Nationally, the impact today must be in the billion-dollar range.
Craigslist started as an email list in 1995 by developer Craig Newmark, who shared the list among his friends in the Bay Area. That grew virally, and today, Craigslist offers local listings in 190 cities in 35 countries around the globe, with more to come. Craigslist serves up more than 4 billion page views per month, making it the 7th most visited English language site in the world. It receives more than 9 million classified ads and 400,000 job listings each month. Yet the Company employs only 22 people.
Today, whether you’re looking to hire an intern, buy a used car, rent an apartment or find an 80 year-old victrola, the first place you will look is probably Craigslist.
Initially, all the listings on Craigslist were free. Even now, Craigslist charges only for certain categories like recruitment ads, and then only a modest fee to discourage spamming the list. While Craigslist operates as a for-profit company, they clearly are leaving a lot of revenue on the table. That comes from the philosophy of founder Craig Newmark, who preaches restoring a human voice to the Internet and providing an alternative to big media.
If Craiglist were to begin charging for more of their classifieds, they could easily turn into a $300-500 million company practically overnight. In the meantime, they have developed a loyal customer base of 10 million users. Having completely transformed the $20 Billion classifieds business, Craigslist is clearly one of the 50 Content Companies that Matter.