December 27, 2004 9:10 PM PST

Report: Craigslist costing newspapers millions

Free community Web site Craigslist has cost San Francisco Bay Area newspapers up to $65 million in employment advertising revenue, according to a report released Monday.

Craigslist, which generates more than 1 billion page-views each month, also has cost the newspapers millions more in merchandise and real estate advertising, and has damaged other traditional classified advertising businesses, according to a report published by Classified Intelligence.

"Craigslist has created an extremely important and valuable marketplace, and perfectly illustrates the changing nature of the classified advertising industry," Peter M. Zollman, founding principal of Classified Intelligence, said in a statement.

Craigslist, launched in 1995, is a bare-bones classifieds site for people looking for almost anything, such as apartments, dates or baseball tickets, in 45 cities. The site has since created a flourishing network of online buyers and sellers while maintaining a simple look and feel free from banner ads.

Local search advertising revenue is expected to reach $502 million in 2004, up from $408 million last year, according to market researcher Jupiter Research. That number is expected to hit $824 million by 2008.

Classified advertising represents a $28 billion to $30 billion business in the United States, including $16 billion in daily newspapers, and an estimated $100 billion business internationally.

Online auction giant eBay took a 25 percent stake in Craigslist in August. eBay also announced recently that it would buy online apartment rental service Rent.com for $415 million.

7 comments

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Where's the URL ???
A story about a Web site -- without a single link to that site??? Not all that hard to tell which side of this story you are on!

What's next, a story about how the evil automobile industry is costing buggy whip manufacturers their livelihood?

Or a shock-alarm-sensationalist newsflash about hypocrisy at the news.cbsi.com (silliest domain name ever, BTW) WEB SITE?
Posted by aabcdefghij987654321 (1721 comments )
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Calm down, Cujo
It must have been a while since you got some...
Posted by (1 comment )
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65 Million, give me a break
I hate these studies that conclude loss of revenue of a traditional business to an online service. In this case, I'm sure the 65 million that the SF Chronicle supposedly lost in revenue represents the revenue the paper could of received if *all* SF area Craigslist posts were placed in the paper. That's total BS. I've posted a number of various ads in my local craigslist, but in the absence of CL, I would definitely not of placed the same ad in the local paper.
Posted by foobarban (4 comments )
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Good for Craigs List!
That is all. Glad to see a '.dot com' is making good.
Posted by (402 comments )
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... and have saved people $65 million
Stories like this imply its a bad thing that newspapers lost $65 million in revenue (if its even true). However remember that is $65 million in advertising costs that people i.e. we the people, saved. Person to person business is more efficient in these instances and that money saved will be available for spending on other things.

Which would you rather do with your hard earned income, blow it on funding advertising and financial middle men, or have it spent directly on goods and services?
Posted by (11 comments )
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boohoo
Some forward-lookers create a net list for the net-saavy to list on and the lethargic, stuck-in-the-past paper moguls won't blame their own limited lack of vision for their loss.

Easier to blame than accept it, eh?

Go Craiglist! Too bad you sold out to eBay...
Posted by Below Meigh (249 comments )
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Love Craigslist
The reason is simple; craigslist is direct and effective. It is successful because it bridge buyers and sellers very efficiently. When I moved from the East coast to the West, I sold all my furnitures, TV, mountain bike, Monitor etc on craigslist and when I arrived here, found a great place to live through craigslist. Newspaper might be better in providing news but not classified ads.

The marketplace may tolerate stupid and silly products and services but it almost never tolerates inefficency.
Posted by penguinista3 (8 comments )
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