The Myth Behind Craigslist: It's Not Maximizing Revenue Potential
from the bull dept
We pointed this out a few years back, but there's this persistent myth behind Craigslist that reporters love to repeat, and it's just not true. The latest is that it shows up in an otherwise excellent profile of Craigslist by Gary Wolf in the latest Wired Magazine. The whole article really is worth reading, though Craig plays up the whole Forrest Gump of the internet schtick a bit more than is fair. However, the article again quotes CEO Jim Buckmaster supposedly brushing off concerns about maximizing revenue:"Companies looking to maximize revenue need to throw as many revenue-generating opportunities at users as they will tolerate."But Buckmaster's very next claim belies the fact that he knows the first half isn't really true:
"We have absolutely no interest in doing that, which I think has been instrumental to the success of craigslist."And, that, really is the point. While it may seem paradoxical, Craigslist actually is being much smarter (on purpose or not) in how it "maximizes profits." It's doing it by not pissing off users and not trying to squeeze them for every possible penny today, knowing correctly that doing so is a horrible long-term strategy. But it's difficult to think of many companies that throw off the sort of profits that Craigslist does on a regular basis. It employs 30 people and most estimates suggest in brings in $100 million in revenue per year. What other companies of that size bring in that much in revenue?
Then look at all the companies that claim they are trying to maximize profits. And compare. I can't see how anyone can take the claim that Craigslist isn't doing that with a straight face. The company knows more about maximizing revenue than probably every celebrity CEO or management consultant out there.
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Filed Under: craig newmark, craigslist, jim buckmaster, maximizing revenue
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ya.. but its not doing stupid things
This is obvious, cause every "evil" company out there does it in the name of maximizing revenue.
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Partner failed doing just that...
In fairness, the pure simplicity and straight forward application is the best feature of CL. This drives some people nuts as they want the next version to be more polished and so on.
This is something that Microsoft needs to learn with Bing. Great search engine, but the opening screen for it IS WAY TOO HEAVY for a quick search engine. Google's KIS approach to me is far preferable and usually faster.
Freedom
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where are the estimates of 100 million a year? thats a lot of houses in San fran (75$) and jobs in six cities ($25)
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Second, "houses in San fran (75$) and jobs in six cities ($25)"...Huh??????? I read that as houses in SF costing $75.00 and six unnamed cities having $25 jobs.....
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well there are certain kinds of jobs you can get in certain areas of those cities for $25, and I understand craigslist is pretty much the place to go to find those deals.
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tolerating
Companies like these that charge you up to and not beyond the level that you would completely quit the service/product. A lot of time people use them simply because there is no quality alternatives.
Just because I can take 100 points of PAIN before going insane doesn't mean that I enjoy PAIN up to 99 points. Actually, I enjoy no pain at all if I am given the choice.
And those same smart ass people, who dare to say this, wonders why people hate them and wonders whey when other less painful alternatives show up, customers fled?
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Alas, they are making enough money and don't care. At least they won't go down the same stupid road as Starbucks.
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workign long term
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Re: workign long term
CL as chosen an extreme "over here" solution that seems good. However, they are leaving the door open for a more nimble competitor to come in, offer the same services, and use income from selected ad spaces to promote their free ad services.
CL risks not being in the position to fight the fight.
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Re: Re: workign long term
Why would they change that and risk upsetting this to fight of a possible bid from a more 'nimble' competitor which hasn't even appeared yet?
Mega greed seems to be one of the biggest corporation-killers out there - why does everyone have to subscribe to it?
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drudge
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A Fair Profit
Good business is always based on delivering fair value and decent service. Craigslist is doing so and profiting handsomely in the process.
It is nice to see that Mike does not expect the people behind Craigslist to not receive any profit from their work as he constantly advocates for inventors.
The average royalty an inventor receives is about 5% of factory wholesale of the product produced. In high volume applications it may fall as low as a tenth of a percent.
So why is it that un-inventive "innovators" try to cheat inventors out of their due and some people cheer them on?
Ronald J. Riley,
I am speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR act PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.
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Ron, why do you always make stuff up? I have never advocated that inventors not receive profits.
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Re: Re: A Fair Profit
There is no justice available to an inventor below ten million dollars of infringement; there may be justice between ten and a hundred million. Over a hundred million it is not difficult to get people willing to enforce the inventors' rights.
Then and only then the inventor might see justice. This depends of the court, and some courts actively encourage the thieves and aid and abet their dragging the case out for ten-30 years. The end result being that most inventors go bankrupt.
And that is why inventors flock to Texas. The court does not tolerate delaying tactics.
Ronald J. Riley,
I am speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR act PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.
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Re: A Fair Profit
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Wired is all over the place
Next we're in the middle of the "good enough" revolution.
And all the time the editor in chief advocates "free".
The article seemed to mix up three things
- how CL could make more money
- how CL could look nicer and maybe be a tad more convenient
- how CL could deal with SPAM / posting abuse
Only the third of these actually has true value if you understand the goal of the company.
The market share of CL tells any sane person all they need to know about whether CL is doing it right in the view of the users. But once again the gadget / tech / pretty colours obsessed media cannot quite stomach such an obvious truth.
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NO Idea, how their 30 people can makes 3 billion per year
Looks at it, you are right each person make 100 million per year. Any other companies can do that, apple?, Exxon Mobile ,
None of them can , not even close. Anyone like here to help me ?
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