In Silicon Valley, we get up with Craig Newmark and go to bed with him. His Craigslist.org classified advertisements website get us our used cars, apartments, jobs, dates and nights out. The service started in San Francisco in 1994 and has since expanded to much of the US and a few European cities including London, Manchester and Dublin.
The service takes away $50 to $65 mln in revenues from newspapers in the San Francisco and Silicon Valley area alone, according to a study by Classified Intelligence. And that's just in lost revenues in the field of job vacancy ads, a market that used to be a certain revenue stream for newspapers.
Craigslist charges $75 for an ad to run one week. A similar ad in a newspaper (either print or online) cost about $700, the researchers said.
Newmark's site is the Network Effect at work: visitors flock to the service because it has all the ads, advertisers come there for the visitors. Add superior customer service to the mix. And of course it also helps that the service is free for anything but job vacancies in all but the San Francisco Bay Area, Los Angeles and San Francisco.
Craigslist is giving the traditional media a run for their money, and in the process succeeds at being a nice guy. Who cares that he kills a monopoly here and there in the process?
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