Like most people, I love Craigslist (CL). I also think - like most people - that Craig Newmark deserves every ounce of success and praise he gets. When eBay bought 25% of Craigslist, I wasn’t yet a user of CL, so I didn’t know what to think from a consumer perspective. But from a business sense, it made sense for eBay, because it was only generating revenue from auctions and it needed a classifieds play sooner or later. While it had Kijiki, that was a startup and would take time to ramp up, so unlike Yahoo!, Google and others who wanted control over CL in any M&A deal, eBay was content to buy in the 25% from CL’s former employee/investor and have no real control over Craig and company.
Frankly, from a business perspective, the deal made a lot of sense for CL as well. Instead of simply getting cash from any investor, it was getting the smartest cash money could buy.
Editor’s note: I stand corrected from Mr. Newmark himself:
It should be stressed however, that eBay did not invest in CL, it bought 25% of the company from a former shareholder. But if CL wanted to fight off fraudsters, it could probably seek to leverage their relationship [or lack thereof] with eBay.
You see, not only is Google gunning for CL with its Google Base product, but large newspapers are starting to get the Web a bit better and shifting their classifieds online. If you want an example of the threat newspapers pose to CL (wow, when was the last time someone said newspapers pose online companies a risk?) look at CareerBuilder.com.
On October 2, 2002 Gannett Co., Inc. joined forces with Knight Ridder and Tribune Company as equal partners of CareerBuilder.com. More than 90 Gannett newspapers are now CareerBuilder.com affiliates and CareerBuilder.com will power the career channel on USATODAY.com. With presence in over 200 local markets, CareerBuilder.com has the recruitment industry covered nationwide.
| Top 10 Online Education and Careers Destinations Week ending April 2, 2006 US, Home and Work |
| Brand or Channel |
Unique Audience (000) |
Active Reach (%) |
| CareerBuilder |
5,648
|
4.34
|
| Monster.com Network |
5,629
|
4.33
|
| AOL Research & Learn^ |
1,636
|
1.26
|
| Merriam-Webster |
1,535
|
1.18
|
| Yahoo! HotJobs |
1,436
|
1.1
|
| MSN Encarta |
1,345
|
1.03
|
| U.S. Dept. of Education (ED) |
1,075
|
0.83
|
| University of Texas |
1,044
|
0.8
|
| Yahoo! Education^ |
988
|
0.76
|
| About Homework Help^ |
974
|
0.75
|
| Source: Nielsen//NetRatings NetView |
What this clearly shows is that while offline companies seem to be the most undesirable companies in the world these days, they have tremendous pull and clout once they decide to get online. What this shows is that in less than four years, CareerBuilder became the largest job classified business on the Web. Not too shabby.
Indeed, when some consider that Craigslist’s biggest threat is Google, they are, quite frankly, on crack. Google is a formidable foe, but it has absolutely no experience or expertise in classifieds. Newspapers do. Of course, newspapers charge, but what CL is realizing is that when you charge, even if a few dollars, you drastically reduce the percentage of fake ads, scams, frauds etc.
Want an example?
I had to look for a new car, so naturally I decided to look at cars on CL. I emailed a few people, and about 75% of my replies came from obvious fraudsters…
Example 1:
———- Forwarded message ———-
From: ****************
Date: May 24, 2006 9:33 AM
Subject: Re: audi
To: Ashkan Karbasfrooshan Good day,
Thank you for your intention to buy my car.I tried to call you but because of a thunder storm my phone is down.The thing is that I really hate to lose it but I must sell it and the part that I don`t like is that I need to sell it on the Internet.However this is the only way I can because, ,I am American, but I recently moved to London, U.K due to work and family,therefore I need a vehicle which complies with their specs here.I`m a fresh daddy I can’t find the time to drive the car anymore.I know that you will say it`s hard to complete a deal like this but my intentions are very straight and serious.I don`t have relatives anymore in the states so I had to bring it with me.The car is still registered in USA and if I`ll sell it to an American it will be more easy for the both of us.I realize that the price is a little low but if I will try to sell it locally it will cost me a fortune to register and nobody will buy.I belive that this means good news for you because the car is in mint condition, no accident history,clear title,no dents or dings,no scratches and it has the original color!I want everything to be O.K. for everyone.I will take care of the shipping and handling because I understand that nobody will pay for it.I post it as being in US, just to avoid paying additional fees.Please mail me back if you think we can make a deal !!!
God Bless You
Right… here’s my credit card # pal… but while we are at it, let me give you my social security number too. And hold on, my PIN # is… You get the idea… and what exactly is a fresh daddy?
Regular CL users have probably seen that CL is expanding internationally. Well, call me old fashioned, but you might want to borrow a page from Colin Powell and ensure that you have a solid base on the defensive side (your backyard, essentially) before you go on the offensive abroad (and better question: why am I quoting Colin Powell, exactly?)
At Mojo Supreme, we have launched a Classifieds Service and kept it free, here is an example of what they look like for now, but fact of the matter is I know that by virtue of keeping it free, it becomes a great tool for fraudsters… as is the case with CL now.
All to say, if CL wants to hold off Google and newspapers, it should start to take some cues from eBay ASAP to find out what big brother does to avoid scams and frauds. Of course, eBay has a lot of information on users, CL practically has none. And that is one reason why Google - as it is now - will not be a massive threat because it too lacks user information, and as such, welcomes fraudsters.
I hope you reading Craig… better yet, I’ll email you pal.
(ah, the lunacy continues)…
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November 4th, 2006 at 2:53 pm
[…] For that click here. For an example of how fast news companies can catch up digital ones, click here. […]
November 6th, 2006 at 9:53 am
[…] This is an industry that right now has nothing to lose (ie. it’s losing as is, so it can take risks), we’ve seen how much leverage they can exert when they launch something (ie. click here to see how impressive was Careerbuilder’s sudden growth). […]
November 12th, 2006 at 1:26 pm
[…] There is certainly a malaise amongst the literati who feel that they have a God-given right to be relevant in social, business and cultural circles and today’s state of matters has challenged that “right.” But as we have seen in a few case studies, when the newspaper companies take a stab at something and give it a good shot, they can threaten any online player; think CareerBuilder.com. […]