The Craigslist business model

Carbondale, Illinois does not yet have free web-based classified ads, but elsewhere, more than 120 cities world-wide use Craigslist, a free community-based web site for market and personal exchanges now being imitated by Ebay. It's tempting to quote the entire New York Times article, but some highlights:

"Until recently, Craigslist was the overlooked underachiever from that fertile class of 1995 start-ups. Like eBay, it began as a free community service that year, a little experiment in applying technology to community-building, not profit-seeking. Craigslist initially provided online listings of local events in the San Francisco Bay Area, the kind that could be found in an alternative newspaper. Visitors were encouraged to contribute, and they added the online equivalent of the mainstream newspaper's classified section. . . .

. . . Craigslist thinks and acts locally, organizing listings city by city for merchandise, jobs, real estate, personals, events, volunteer opportunities and discussion forums. . . . Today, 99.2 percent of Craigslist advertisements remain free.

If you're the publisher of a local newspaper, you're spending a lot of time thinking about Craigslist. Traditionally, local newspapers have derived 30 to 50 percent of their advertising revenue from the classifieds. . . .

Late last month, Knight Ridder Digital announced its plan to finesse the challenge of free classifieds: it dropped fees for ads for merchandise posted on the Web sites of 22 of its newspapers. When you visit one of these sites and prepare to submit an ad, however, you must navigate past pitches for various fee-based upgrades. . . . . What part of 'free' is difficult to understand?"

"Five years after the technology bubble burst, the success of Craigslist shows an enduring public appetite for online offerings that closely complement life lived off line. Being 99.2 percent free doesn't hurt either.

. . . In February, eBay started Kijiji, a set of more than 50 international sites providing free classifieds, similar to Craigslist, in cities in Canada, China, France, Germany, Italy and Japan. . . . In some cities, Kijiji and Craigslist co-exist, with Kijiji offering the local language and Craigslist offering English-only listings.

Would Craigslist (by another name) work in Carbondale? In Southern Illinois? This would be an interesting marketing project for university students looking for real world experience. . . . Professor Clark . . . are you reading this?