Entrepreneurs-Journey.com

by Bryan Clark - EJ News

I don’t know about you, but I nearly kicked myself when I found out how much Craig Newmark was making for setting up an ultra-simplistic classified service called Craigslist. It rakes in millions per year for listing FREE classified ads. How did that one skip past me?

It all started for Craigslist in 1994 when Craig Newmark, a java programmer by trade, moved to San Francisco. Feeling isolated from the rest of the world, Craig began fiddling with the primitive version of Craigslist in mid-1994 hoping to create a social community for locals that would divulge information about pending local events, and provide a social environment for networking and posting classified ads.

There wasn’t a whole lot of growth out of the gates for Newmark or Craigslist, which was directly attributed to bad software. Newmark made the switch to Majordomo in 1995 after several months where the site lay dormant. This is where the growth began. To kick-start the site he began collecting business cards from everyone he knew in order to create a massive email database. This database would prove to be the turning point for the Craigslist that we have become accustomed to.

By 1999 the site had grown so much that Craig Newmark had to volunteer his flat on Cole St. to his “hobby” and it’s nine employees. The same year the site was declared a non-profit and turned down many requests from ravenous venture capitalist firms. Rather than taking the venture capital money, Newmark embarked on his own mission to keep his creation free for everyone (mostly… more on this in a minute), and to provide a friendly, trusting, and social community that was available to the masses.

Even without the Venture Capital money, and with the site being labeled as a non-profit, conservative estimates put Craigslists earnings at about 18 million a year. How is this possible for a simplistic site that is run from the same home that it started in and has only 23 employees? Some cities (New York, Los Angeles, and San Francisco) have to pay to post job listings. That’s it. That’s the whole formula! 18 million a year for charging companies to list job openings… brilliant!

However brilliant, Craigslist isn’t without opposition. Today it is catching more heat than ever for it’s “downfalls”. Prostitution, sale of stolen goods, fraud, and more have some calling for radical changes to the way Craigslist does business. Craig Newmarks response?

We cannot and will not police Craigslist. It’s an open community made to be shared by everyone. We assist law enforcement in any way we can when these situations come to our attention. But it’s not our place to decide what people can and can’t do… we just provide the place for them to do it.

Although Craig Newmark is still the face of Craigslist, he now owns less than 50% of the company. In 2001 he sold a stake of the company to the current CEO Jim Buckmaster. Another big (and recent) investor in Craigslist is eBay; who bought a 25% stake in the company in 2004.

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