|
The strangely successful, primarily free, online classified ad site Craigslist has never been into maximizing profits, yet a recent scrap with eBay could change its approach. Craigslist is unique because it is a homely, text-heavy site that is among America's top ten in monthly page views and time usage. To a remarkable degree, however, craigslist steadfastly refused to turn on any moneymaking machinery. Craigslist's free service is hard to beat and very good business. Research company Classified Intelligence expects Craigslist to earn $81 million in revenue in 2008, compared to $55 million in 2007, from help-wanted listings and paid real-estate listings. Founder Craig Newmark admits that he only has a vague idea of what Craigslist's revenues are. Newmark and CEO Jim Buckmaster seem uninterested in selling their company or in doing anything different than what they have been doing all along, only in more cities, more countries, and more languages. However, minority investor eBay sued Craigslist in April 2008 for improperly diluting its 25 percent stake. Buckmaster had blogged that eBay had no cause for fear, yet eBay's move into low-cost classifieds, via its kijiji.com unit, clearly ruffled some feathers at Craigslist. In July 2007, eBay's then-CEO Meg Whitman said that eBay would like to purchase Craigslist when Craigslist was ready. It is unclear what buying out eBay would involve, and why eBay invested in Craigslist, because it is so patently indifferent to many routine business mores. Yet Craigslist remains a valuable phenomenon on the Web. The outcome of the eBay/Craigslist scrap will determine if the unbusinesslike--but very profitable--ways of Craigslist can continue, or if real-world pressures will change the complexion of one of the Web's oldest old-school players.
|