Newspapers earned 36% of their 2004 revenues and a large chunk of their profits from classified ads—and Craigslist is burning up that market. So far, nationwide classified revenues continue to grow. But in cities where Craigslist is well established, the trends are ominous. In San Francisco, for example, Classified Intelligence Report, an industry newsletter, found that the major newspapers lost more than $50 million in classified revenue in 2004 because of the Craigslist effect. With several major papers announcing job cuts, and the stock prices of all the major newspaper groups down at least 10% this year, this old-economy stalwart may be primed for a world of hurt.The San Francisco Weekly says Newmark's "well-intentioned support of citizen journalism has a slim chance of fixing the problem." How? It's hard to tell:
Considering how often he speaks publicly about citizen journalism and the future of media, Newmark is extremely guarded about his own ventures. He reveals only that he's working on three major projects -- advising two new foundations and investing in one start-up company -- all in stealth mode. The East Coast start-up was founded by Upendra Shardanand, a creator of Firefly (now Microsoft Passport), software that collects individual user information based on behavior, then recommends appropriate content…Next spring, they'll release technology that identifies the most important stories and most "trusted" versions -- a computerized or computer-aided "editor." As for the nonprofits, Newmark'll only say that the people running them "are a big deal ... the names involved are heavy media commentators."I'm guessing any cries of "Give It To Us!" from newspaper editors will go unheeded.
Newmark has been meeting with a host of public-interest media companies and foundations (the Center for Public Integrity, the Center for Investigative Reporting, Wikinews, FactCheck.org) for months but hasn't made up his mind on where else his money should go: "I'm wondering about this. I have a little cash to give away. What's the most that I can do?"