Craigslist and its Business Model

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Case Details:

Case Code : BSTR340
Case Length : 26 Pages
Period : 1995-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Craigslist, Inc.
Industry : Online Classifieds
Countries : USA; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We are so unlike the other top ten Internet companies. Most of them have tens of thousands of employees. We don't attempt to maximize revenues, hence we don't have sales, marketing, business development teams, or advertising teams. We don't run banner ads or text ads or pop-ups. We have reversed the normal business model. The community of Craigslist is number one. Making money is number two." 1

- Jim Buckmaster, CEO of Craigslist, Inc. in 2006.

"Craigslist, in terms of its capabilities and so on, leaves a lot to be desired. But it's such a trusted brand and such a widely used site. It's the leader in the general classified segment by some margin. ... All the others, without exception, have better functionality. But Craigslist has the luxury because it's such a widely known and trusted site and so successful. It's sort of thumbed its nose at the user experience and the home-spun elements are part of its appeal. It doesn't appear slick or corporate." 2

- Greg Sterling, founding principal of Sterling Market Intelligence3, in 2007.

"South Carolina joins other states in calling for tighter Craigslist ad scrutiny, which could threaten Craigslist's low-cost, laissez faire business model."4

- BusinessWeek5, May 8, 2009.


In June 2009, Advanced Interactive Media Group LLC (AIM)6 in its report titled Classified Intelligence Report, claimed that the revenues of US-based Craigslist, Inc., the largest provider of online classified ads, was expected to cross US$ 100 million in 2009.

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1] Andrew Cave, "Business Profile: Becoming a Billionaire? That's Not on My List...,", March 18, 2006.
2] Fred J.Aun, "eBay's Kijiji Makes Stealthy Move into Craigslist Turf,", May 7, 2007.
3] Sterling Market Intelligence (SMI) is a consulting and research firm which focuses on the influence of the Internet on the consumer purchase behavior.
4] Olga Kharif, "Will Craigslist Have to Crack Down?", May 8, 2009.
5] BusinessWeek is a weekly business magazine published by the McGraw-Hill Companies.
6] The Advanced Interactive Media Group LLC is a US-based research and consulting firm for the classifieds industry

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