July 25, 2008 7:29 AM
American newspapers are getting hammered by evaporating classified ads, but Craigslist isn't (SAI 25 No. 3). CEO Jim Buckmaster shared some June numbers that will make a newspaper publisher weep: housing ads are up 85% y/y, with rental ads up 120% and real estate up 70%.
Still, even as Craigslist takes market share, it is not immune to market conditions. Employment ads are flat in the first six months of 2008, reflecting a slowdown in Craigslist' biggest and most mature markets -- San Francisco, New York City, Los Angeles, Seattle, Boston and DC.
But employment ads are growing elsewhere: in fact, Craigslist is considering adding listing fees in eight additional markets -- Atlanta, Austin, Denver, Houston, Miami, Philadelphia and Phoenix -- due to higher demand. Craigslist currently charges for employment ads in 10 cities and for real estate ads in New York City.
Buckmaster stopped by SAI world headquarters for a chat; Henry Blodget is on the record putting a $5 billion valuation on Craigslist, provided they took the bold step of charging for all employment ads instead of just in 10 markets. But that's not happening anytime soon. "We love providing a service people love; that's more important to us than financial gain," Buckmaster said. "We evolve the site in ways users are asking us for, and users don't ask us to run text ads or banner ads." Indeed, Craigslist charges for employment classifieds not because it needs the money, but to discourage spammers.
So, what else is happening with the world's most popular classified service?
- Growth is, in fact, slowing slightly. This may be the first year since the beginning (1995) that pages views haven't grown 100% y/y
- Growth is slowing in mature markets (SF, NY, DC, LA, etc) but accelerating in Midwest and southern cities, in some cases 1000% y/y
- Craigslist is getting 50 million unique visitors and 12 billion page views a month
- Craigslist launched 120 new cities in April; most outside the US. The fastest-growing international cities are London, Paris, Manila and, after years of relative dormancy, China
- Future sites will largely be outside the US and Canada
- The company has implemented technologies to cut down spam and inappropriate content, but Buckmaster says the Craigslist community is still the most important factor in policing the 35 million classified ads posted each month
- In 2000, Craigslist was run on one PC running Linux and handled 6 million page views a month. Today, it has two co-location facilities and 300 servers
On advice from his lawyers Buckmaster offered no update on the legal dispute with eBay. Recall, eBay sued Craigslist for allegedly diluting the value of its 28% stake. Craigslist countersued, claiming eBay used its position on the board to gather intelligence to launch its own Craigslist killer, Kijiji.