Computer engineer Craig Newmark is an accidental entrepreneur. He started Craigslist as a hobby in 1995, when he was living in San Francisco and saw a lot of people helping each other out over the Internet.
"I decided that I should give back a little," he recalls, "so I started a very simple mailing list for events in San Francisco." As people provided suggestions, he responded.
The site gradually expanded to include classified ads, discussion forums and community notices. Today, Craigslist users can find almost anything they want, from furniture for their home to a date for the evening.
It is a simple text-based site, and Newmark says that it offers a basic service: it's the place to go to find a job or a place to live, or to sell your unwanted items, all in your neighborhood. "It works out kind of like a flea market, which is to say it's very down to earth and grassroots."
Newmark says part of the reason Craigslist is so successful is it eliminates the middleman and lets its users deal directly with each other.
A free service that makes money
For most users, Craigslist is free. The company generates revenue by charging businesses a fee to post ads for job openings. It also charges New York housing brokers a fee to post their ads. The prices are a bargain – far lower than those charged for classified ads in newspapers – and wherever Craigslist is popular, newspapers lose money.
Craigslist is privately held and does not discuss its finances, but one industry analyst estimates its current annual revenues at $80 million. The company, which has just 25 employees, is housed in a Victorian wood-frame house in San Francisco. Yet from its inconspicuous office, it has created online communities in more than 500 cities, in 55 countries, from Mexico to Malaysia.
Newmark downplays his own skills as a manager, and says the company's chief executive, Jim Buckmaster, provides the business guidance. Newmark is low-key and unassuming, and says his main role today is ensuring good customer service.
Craigslist is currently involved in a legal quarrel with business partner eBay. The giant Internet auction site holds a minority share in Craigslist. The two companies are doing battle in court in a dispute that could determine the future direction of Craigslist.
Craigslist has also had problems with people trying to use its site for fraud or illicit activities. One user allegedly tried to hire an assassin to kill a romantic rival. But users can flag questionable postings, and if enough of them do that, the listing is deleted.
Newmark says the site is overseen by those who use it, in keeping with the philosophy of his company: "Provide a culture of trust, work with people to build and maintain that, and you can trust people, people can trust each other." He says that while there are some "bad guys" out there, the site provides its community with the means of detecting and getting rid of them.
Everyone's printing press
Newmark says Internet sites like Craigslist are creating virtual communities and giving everyone – not just the powerful or influential – a forum in which to express themselves. "There are people who now have a voice that never had a voice before, and that helps people out."
Newmark says he is relying on technology to help him expand the reach of the Craigslist site, allowing users to build new web-based communities in more and more cities around the world. He says the site is growing in the Middle East, with a local site now operating in the city of Ramallah, a location suggested to Newmark by Palestinian friends.
Craigslist faces competition from Internet rivals such as Kijiji, which eBay introduced to the U.S. market in 2005. And Wal-Mart, the world's biggest retailer, now offers free classified ads on its website.
Newmark says despite the competition, he and CEO Jim Buckmaster are determined to keep the site user-based, and have no intention of taking the company public and becoming billionaires. "We've made a decision based on our values, which we share with most people," he says, explaining, "Once you've made enough money to have a comfortable living, and to do a little better than that – maybe save for retirement – what's the point of making more? It feels better to change the world a little."