Let the conspiracy theorists have their day. Craigslist is going to continue to do things in its own merry way. It doesn’t expect to step up its activity with minority owner eBay, it isn’t worried about competition, and it isn’t especially embarrassed about its hard-to- search, thin-featured, plain-vanilla technology. All of this according to Craigslist CEO Jim Buckmaster, speaking Feb. 1 at the SIIA Summit in New York.
Forbes Magazine estimates that Craigslist made $20 million in 2005, and had $5 million in expenses, mostly for its 19 employees – 10 of whom are tech support and programmers. If Craigslist was run like a typical media company, Forbes suggests that the company would have made closer to $550 million. But if Craigslist has left money on the table, Buckmaster – clad in a black zippered-up turtleneck amidst the SIIA’s suits -said he doesn’t care. He and his colleagues are very well paid but don’t need to be “bodyguard rich.”
Indeed, Buckmaster painted a picture of a company that is focused on reaching as many markets as possible and as quickly as possible – while broadening its demographics, which started with “20-30 somethings, but is now skewing older, with lots of users in 40s, 50s, even 60s.” Next up is the targeting of dozens of smaller markets. With evident pride, Buckmaster noted that the site’s job boards are already reported to “have more traffic than Monster and Careerbuilder combined.”
As Craigslist grows, Buckmaster said the company has noted that different types of classifieds prevail in different markets – an interesting phenomenon. “Different markets have different factors,” he said. “In LA, we are ‘reality TV show central.’ Lots of shows get their contestants from the site. But in New York, apartments are hard to find.”
While most of the site is free, and will remain so, Craigslist is charging $75 for recruitment ads in the Bay Area, where it has a dominant position. Buckmaster scoffs, however, at former SF Gate GM Bob Cauthorn’s SWAG that Craig has “sucked $50 million” out of the market, mostly at the expense of The San Francisco Chronicle and SF Gate. “It sounds high to me,” he said.
Other revenue streams are forming. Craigslist is charging $25 for recruitment ads in New York and Los Angeles. It may also start charging for recruitment ads in San Diego, Boston and Seattle. The site also going to begin charging $10 for apartment ads in New York, but only “because brokers begged them to do it” so they wouldn’t have to keep putting in the same information, over and over again – something that is necessitated by the primitive system, which puts the most recent posting on top, and lets older postings sink off to listings Siberia.
At the same time, Buckmaster candidly admits that the company is technologically overwhelmed by its success, and is barely able to keep up, much less add ambitious new services and technology. “We’ll add incremental features, based on what users ask for. But we don’t live on the bleeding edge of technology,” noted Buckmaster. An upgrade project invariably “gets prioritized, and then reprioritized down.”
Apparently, however, the last thing Buckmaster would want to do is start whole-sale hiring. The company is big on culture, and employees don’t tend to leave “unless they want to go traveling” or something, he said.
As for eBay’s influence, one would assume that eBay’s horde of Stamford MBAs would be scheming away to leverage its 25 percent interest in Craigslist, and eventually take it over. But Buckmaster said it is mostly “hands off” between the two companies, and anyway, they have little in common. Ninety percent of eBay’s transactions are long distance,” he said. “In our case, the reverse is true. “Well above 90 percent” of Craigslist users “meet face-to-face and people pay each other directly. “That is a tremendous asset. With our local model, we are not a great lead for PayPal,” he added. There is also “much less scope for scams” – although eBay has provided helpful suggestions for how to handle scams when they come up.
Buckmaster also noted that EBay is also entirely focused on “buy and sell” support, and needs to track identity information to prevent credit card abuse, etc. But Craigslist has a wide assortment of categories to support, such as apartment features, etc. “The business is very different than eBay,” he said – not addressing eBay’s efforts in parts of Europe with Kijiji, a super-classifieds site that is quite a lot like Craigslist, and presumably headed to the States at some point.