Report: Craigslist '09 Revenue To Hit $100 Mill; But Is It Really A Newspaper Killer?
This story was written by Rory Maher.
Craigslist began in 1995 when founder Craig Newmark started e-mailing friends and colleagues about events in the San Francisco area and through the years has grown into a national business with classified ads in nearly every American city. The site currently has over 50 million unique monthly visitors, according to Compete. But how much revenue does that translate into for a business that only charges a small fee for paid job listings? A lot, according to a report by researcher Advanced Interactive Media Group (AIM Group). In a report released today AIM Group estimates 2009 revenue should reach $100 million - 23 percent more than during 2008. We reported on the 2008 estimated numbers, also from AIM, in detail last year.
Craigslist only charges for its job listings in 18 major cities in U.S. ($25, and $75 in San Fransisco; the rest of the 570 total cities it operates sites in are free), and for its real estate ads ($10 per ad) in New York City only. It also charges for its controversial adult ads section. According to the study, New York City is its biggest market, with an estimated $17.7 million projection in 2009, and San Francisco, its hometown, is the second biggest with $14.4 million in revenues. Recruitment ads are projected to account for $85 million of the total revs, with housing ads accounting for about $9 million, and adult ads about $4 million, according to the report.
Compare these numbers to an overall classified revenues drop of 29 percent in 2008, for the nespaper companies, according to NAA, the worst in history.
But Craigslist's estimated revenues number doesn't reflect what many see as a company that is responsible for the steep decline in newspaper classified revenue. It's tough to quantify the impact its non-help-wanted ads have on newspapers since the company doesn't charge for those ads, but one can draw conclusions from the help-wanted ads, which it does charge for. For example, Glennco Consulting Group estimates 2009 newspaper help wanted advertising will decline about 50 percent to roughly $1 billion, which is inline with many analyst forecasts. That would mean that even if Craigslist went from $0 in 2008 revenue to $100 million in 2009 revenue due to its paid job listings it would only account for about 10 percent of the decline in newspaper help wanted advertising during that period. What is also contributing to the erosion? A weak job environment likely has something to do with it, but other online classified sites like Monster.com, Hotjobs.com, and smaller sites like ilist.com and Kijiji.com are also likely taking a large chunk of help wanted advertising that used to be the domain of the newspapers.
Photo Credit: Flickr/InfoMofo
By Rory Maher