Craigslist

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Craigslist
Will Dick Matt Doherty Eric Gallic Ryan
Foley Ryan Gelchion
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Craigslist
Introduction
The Facts

• Craigslist is the undisputed leader in online
  classifieds
• One can find listings for jobs, real estates,
  goods, services, advice, and romance
• Founded by Craig Newmark in 1994
• Started as simply an e-mail list for friends
• CEO Jim Buckmaster
• Both Buckmaster and Newmark remain uninterested
  in monetization
• For Craigslist, the customer always comes first

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Craigslist
Firm Information
Size

• 24 person staff, all work out of Victorian home
  in San Francisco.
• Only 3 board members
• Over 8 billion page views per month
• Currently ranked 7th most trafficked site in
  the US
• Amass over 30 million users each month
• 25 million classified ads are posted each month

How do they make money?

• Makes money in only 2 ways
• From job postings in only 7 cities (NYC, LA, San
  Diego, Boston, Seattle, Washington DC, and San
  Francisco) - 75 for SF 25 for rest
• From apartment listings in NYC - 10
• No money is made in advertising they simply
  dont engage in it

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Craigslist
Firm Information (cont.)
Revenue and Profitability

• Dont actually disclose any of their financial
  information
• Analysts estimate the company made over 25
  million in 2006

Exponential Growth

• These same analysts estimate the company will
  bring in over 150 million in 2007
• A 500 increase

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Craigslist
Industry Information
Sitting Pretty at the Top

• No one has attempted to go head to head with
  Craigslist
• Craigslist remains by far the leader in the
  industry
• Craigslist is viewed as a formidable foe by
  Monster, HotJobs, and CareerBuilder.
• Crippling newspaper classifieds
• Newspapers in SF claim 50 million in losses
  annually

Recent Competition

• From eBay
• Just launched Kijiji, a program that is a clone
  of Craigslist
• Launched in 220 cities and all 50 states on June
  29th, 2007
• eBay forced to straddle two markets

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Craigslist
Industry Information (cont.)
eBay a true competitor?

• eBay has admitted that they are not attempting
  to directly challenge Craigslist
• Kijiji will target small and midsize communities
  eBay finds are underserved by Craigslist
• Makes sense eBay bought 25 of Craigslist in
  August, 2004.

Concerns from Craigslist?

• None in the CEOs eyes
• Buckmaster claims he does not worry about
  competition
• We dont worry about competitionIt saves me a
  lot of grief
• With such an upper hand in the industry,
  Criagslist remains unworried about any competition

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Craigslist
Relationship between Tech and the Firm
The facts

• Standard internet technology
• Crowd sourcing initiatives
• Vastly increases efficiency and speed
• Example users flag inappropriate postings and
  make suggestions
• Example users contribute suggestions to improve
  the site
• NYC suggested 10 for job ads
• Overall a trailing edge technology company

Allows Craigslist to

• have only 24 employees
• yet still expand into 450 cities and 50 countries

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Craigslist
Relationship between Tech and the Firm
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Craigslist
Competitive Advantage
Network Effects

• Primary source of competitive advantage
• Buyers attract sellers and sellers attract buyers
• Over their 12 year existence, Craigslist has been
  able to develop a long-tail effect

Scale

• Started as a local website for listings in the
  San Fran area only
• Massive growth since then
• Craigslist has now established itself in 450
  cities
• As well as 50 countries

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Craigslist
Competitive Advantage (cont.)
Brand

• Synonymous with online classifieds

Viral Marketing

• Criagslist relies solely on viral word-of-mouth
  marketing
• Eliminates the need for a marketing department
• Able to save a great deal of money

Imitation Resistant Value

• No competitor can hope to match Craigslists
  dominance in the industry

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Craigslist
Opportunities Threats
Opportunities

• Craigslist is tapping a small proportion of the
  total business
• Charging fees in only 7 of the 450 cities it
  operates in
• Effective as of November 1st, 2007, Craigslist
  will be charging 25 for job postings in 4 more
  cities
• Orange County, Sacramento, Chicago, and Portland
• Will they continue to charge fees in more cities?
• Depends solely on the customers
• If it's not something that users are asking for,
  we don't consider it.
• Going Public?
• Newmark continues to claim hes uninterested
• The idea isnt on my radarthe idea makes my
  brain hurt

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Craigslist
Opportunities and Threats
Threats

• Craigslists business model is great, but its
  not perfect
• In 2006 a Chicago group filed suit against
  Craigslist
• for displaying housing ads that excluded races
  mainly African Americans, Arabs, and
  non-Christians
• the lawsuit was eventually dismissed because
  Craigslist was defined as an interactive
  computer service, rather than a publisher of
  information, and therefore subject to different
  rules
• the court, however, made Craigslist aware that it
  is not immune from legal liability for postings
  displayed on its website

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Craigslist
Opportunities and Threats (cont.)
Dealing with these threats

• The same crowd sourcing that gives Craigslist an
  advantage also serves as a liability
• Must deal with this issue
• advantage of eBay
• increased security on the site