Craig$list.com

The much-loved Web site is taking millions from Bay Area newspapers and causing layoffs that adversely affect coverage. And its founder's well-intentioned support of citizen journalism has a slim chance of fixing the problem.

As a private for-profit, Craigslist doesn't have to publicly disclose anything. SF Weeklyparent company New Times doesn't release many financial details, either. Newmark, though, views his creation as something different. "We do a better job as a nominal for-profit," he says, "but we exist in a category that doesn't really exist in the law."

That "category" allows Newmark to keep the domain Craigslist.org, a name that gives the false impression that the site is a nonprofit, by using ".org," an extension almost exclusively used by nonprofit companies and foundations. Craigslist's marketing materials call this "a symbol of our service mission and non-corporate culture." (Craigslist.com, which the company also owns, draws far less traffic.) It permits Newmark to use the word "non-commercial" twice on Craigslist's "Mission and History" page, and to bury the phrase "No charges, except for job postings" in the third line from the bottom. It means establishing a separate nonprofit, the Craigslist Foundation, which trains other nonprofits in marketing, technology, and fundraising skills, but makes no grants, has no endowment, and charges for many of its training events. This year, Craigslist will provide less than half of the foundation's $240,000 budget.

"We are a marketplace, like a flea market," Newmark says. "A flea market is more social and entertainment than commerce. In more formal terms, we are a community service. We have a company structure because that's the way life works, but that's kind of tertiary."

Newmark's home office, like his citizen 
journalism efforts, is still a work in progress.
Gabriela Hasbun
Newmark's home office, like his citizen journalism efforts, is still a work in progress.
More than 6 million classified ads are 
posted to Craigslist's 190 worldwide sites 
each month.
More than 6 million classified ads are posted to Craigslist's 190 worldwide sites each month.

Even Buckmaster admits that Newmark's vision is a little utopian: "He still has trouble seeing us as a corporation, and taking seriously all the things that a corporation has got to do."

Newmark's financial secrecy conflicts with his idea of what Craigslist is, but so does the amount of money Craigslist makes. The revenue range often reported for Craigslist is $7 million to $10 million per year -- successful, but not extraordinary, for a company with about 20 employees. However, the job postings on the Bay Area Craigslist indicate a much larger number: more than 20,000 ads, or $1.5 million in revenue, this month. Add in 14,000 jobs this month in both Los Angeles and New York, and that's $2.2 million. Even assuming November is by far the busiest month, and that Craigslist doesn't charge for most ads by nonprofits, that puts the site's estimated revenue stream at $20 million per year -- minimum. To be sure, that's less than 1 percent of the revenue of sites with similar traffic levels, and Craigslist only charges for a tiny percentage of ads, but that doesn't erase its millions in hush-hush profits.

Craigslist will soon charge real estate brokers to advertise in New York (where brokers posted more than 100,000 apartment ads last week), and Buckmaster says the company may shortly require payment for job postings in a few more cities. Even at low rates, this would add tens of millions to Craigslist's revenue. Buckmaster claims that a "small" fee is necessary to discourage the posting of spam and fraud on an already-crowded site, and to pay for overhead. Yet Craigslist was profitable with about the same number of employees when it made just $5 million annually. So where do all those extra millions go?

It's hard to reconcile Newmark's utopian vision with Craigslist's real-world revenues and the site's effect on the media. To his credit, Newmark is obviously struggling with the issue. He doesn't want to cause job losses, or contribute to journalism's decline, and he hopes to use his power and money to fix the problem, but he isn't sure exactly how: "I don't know much about what to do about it, except to accelerate change. The news industry is experiencing serious dislocation. It's happening. The faster it happens, the faster we get to new technologies, the more money and more opportunities journalists and editors will have."

For nearly a year, he's been talking up the use of new technologies, especially the potential of online citizen journalism. Now, he's finally ready to put his money where his mouth is by funding a new venture. "It needs noise, buzz, and some smartass like me getting people to talk," he says, animated as a preacher, so excited he nearly jumps out of his chair. "And I have to dwell on this, and this is big, and this may be the biggest contribution I ever make."


Citizen journalism may be a young movement, but it's already branched out into dozens of disparate formats. There are hyperlocal sites, such as h2otown.info, a self-described "fun news site" written and edited by and for residents of Watertown, Mass., population 32,603. There are multimedia sites, such as Ourmedia.org, which hosts everything from a podcast of news for Milwaukee's German community to a video of a Northern Irishman's ski trip to France. There are sites that turn readers into volunteer reporters for traditional newspapers, such as the YourNews section on the Web site of Greensboro, N.C.'s News & Record. There are sites staffed mostly by citizen reporters, such as Korea's OhMyNews, and sites staffed solely by users, such as Wikinews.

In short, citizen journalism is anything that looks like journalism but isn't written by a "professional." The nature of news gathering lends itself to help from laypeople, just as someone who pays for psychotherapy might also ask a friend for free advice. Visit the most highly touted citizen journalism sites, though, and it's easy to see why professional journalists attack it as an idealistic concept. This summer, Dan Gillmor, writer of last year's citizen journalism bible We the Media and one of Newmark's "advisers," launched Bayosphere. Ostensibly written "of, by and for the Bay Area," Bayosphere is largely blog posts by Gillmor, a former San Jose Mercury Newscolumnist, with a few citizens' articles tossed in. At Bluffton Today, Morris Communications' South Carolina citizen journalism site and tabloid, the top post a few weeks ago was headlined: "Learning about volleyball from great teachers." The same day, the top story on the citizen-written, citizen-edited Wikinews, an offshoot of the user-edited Wikipedia online encyclopedia, was: "Farmers hunt for missing bull semen."

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