Craigslist's business model may not seem aggressive — most of the classifieds site's content is posted free — but its community-based model is on track to rake in revenue this year. Craigslist.org is projected to earn $100 million in revenue according to a study by the AIM Group.

And part of the secret sauce is in the Craigslist community. Instead of focusing on generating revenue, Craigslist says it relies on “local communities to suggest ways to make money without compromising craigslist” And that appears to be working, and CEO Craig Newmark says that he is “constantly engaged in community service,” and the site is heavily focused on engaging its community of users.

Most postings on the site are free, but the company charges recruiters and real estate brokers in major cities between $10 and $75 to post job and property listings. 80% of the projected revenue is expected to come from the more than 1 million job listings Craigslist posts a month, with real estate making up the remainder.

In contrast, newspaper ad revenues are down 29%, according to the Newspaper Association of America.

Craigslist CEO Craig Newmark doesn’t buy into the theory that Craigslist has been a major contributer to the demise of newspapers, however. Speaking in New York last week, he said that the biggest threat to publishing is that people rarely look at advertising on those sites.

But on Craigslist, people only look at ads. That fact, combined with its trusted reputation, has helped the site navigate some difficult territory. Newmark says that the current battle Craigslist is fighting about its “adult services” ads on the site has generated increased amounts of community support. And while battling for its rights to post such ads on the site, Craigslist says it had donated money made from that category to charity.

Despite its increasing revenues, Craigslist is still a .org domain, and the site boasts of the “relatively noncommercial nature of craigslist, as well as our service mission and non-corporate culture.”

As Craigslist continues to generate revenue, it will be interesting to see where else it puts its earnings. The company incorporated in 1999, and with only 30 employees, revenues upwards of $100 million seem to fit squarely into the commercial category.

Meghan Keane

Published 10 June, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Anthony

Thanks for sharing information!!!!!!

Classifieds taking important part to improve the business. Classifieds easily reach the people. There are so many classified sites to send the classifieds. Classified sites have different categories to post the classifieds in appropriate category.

over 8 years ago

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