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RSSUBS analyst Ben Schachter asked Buckmaster a standard financial world question: How does the site plan to maximize revenue?
The CEO of the online classifieds site answered as follows: "That definitely is not part of the equation. It's not part of the goal."
"I think a lot of people are catching their breath right now," responded Schachter, as the crowd absorbed Buckmaster's remarks.
Buckmaster, on stage in jeans and a blazer, insisted that the company--which has emerged as a significant threat to newspapers and other companies that sell classified ads--doesn't especially want to make money.
While it charges for job listings in seven cities ($75 in San Francisco, $25 in the other six) and apartment listings by brokers in New York ($10), those charges aren't to make a profit as much as to cover expenses and keep out scammers, Buckmaster said. He added that some users requested the fees, in hopes of keeping the listings legitimate.
How did the site arrive at $10 for real estate listings, Schachter asked.
"Ten dollars sounded like a nice round number," Buckmaster answered, totally deadpan, as the crowd laughed.
Schachter pressed Buckmaster on how the site could make more money. Specifically, he asked if the company considered hooking up with Google for AdSense ads.
Buckmaster acknowledged that Craigslist had been approached about placing text ads on the site. "We've had the numbers crunched for us," he said. "The numbers are quite staggering."
But, no, the site wasn't interested. "No users have been requesting that we run text ads, so for us, that's the end of the story," he said to the befuddlement of the crowd. "If users start calling out for text ads, we'll listen."
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These types of organizations don't run at a deficit - quite the contrary. All it means to be a non-profit is you do not disburse the profits to shareholders; you use them to achieve your mission.
From a charity standpoint, a "doing good" standpoint, it is best for them to make ENORMOUS profits. More profits = more care for the sick or food for the hungry.
At STILL no one has explained how he keeps the light on.
Now, on the other hand, Mr. Buckmaster has a vehicle that is capable of making a lot of money. He can still choose to maintain his current lifestyle while making some positive use of that money. Mr. Buckmaster could take the excess funds and donate them to charity, as there are certainly enough people in the world who need food, clothing , shelter and healthcare.
Will CL overpower and drive out of business major media? No, I doubt it. You can see for yourself by sitting in a "self-service" gas station and watch people pull into a "full service" station across the street and pay twenty five cents more per gallon for the same thing.
Lastly, I think Mr Buckmaster agreed to address the UBS global media conference with his tongue firmly in his cheek. For that matter, I bet he is still chuckling
But what if one day these guys sell out to Google (who despite their 'do no evil' philosophy don't count making money as evil) and they turn it into a profit maker. Betrayal! Poor exploited consumer!
How is this different to pricing garbage collection routes below cost, driving your competitor out of business and then raising rates later when you have the market to your self. Competition lawyers??
Please CL, by all means offer banner adds on your pages, and then feel free to continue to hold a small-revenue business model, but take that $500 million and re-invest in filtering technology and hire more staff to help improve the quality of the site.
As growth increases sometimes principles have to be re-evaluated. Wikipedia had to redefine how they dealt with "contributions" when they suddenly found themselves to be the go-to for information. CL needs to redefine the community aspect of their listings. Shady real-estate agents are not welcome in my community.
So I ask again - if they realy don't care about cash how to they keep the lights on? How to they maintain the server farm? I mean right now, how are the bills paid? SOMEONE has to provide cash.
Sounds like an expensive - and well done "hobby". Or disingenuous remarks.
Yet they don't have to pander a single word to the financial industry, and they are self-sufficent on a modest revenue profile. And with patience uncommon in this "get the money and run" business culture, they build a global brand from nothing at all, and are poised to become immensely powerful, while appearing to be uncaring of success - who would/could take them on? Nobody - they've outmaneuvered industry giants 10,000x bigger.
Its all viral. Like Google, its all text. It grows organically, with an expense profile unimaginably low. Subtile marketing. Immense customer loyalty and proven brand value.
Don't need to monitize fast - simply by occupying the space, they drive the potential value of CL to astronomical heights. Which is why the "ebay money" that went into them years back was so wise. Like Pierre Omidyar did with Ebay, you wait for the correct monitization strategy to present itself, and to happen.
Not only does it meet the Google Test, it may eventually yeild much greater than Google multiplier for its founders.
All of this in plain sight, for years. Most still don't see it even now. Wow!
At some point adults have to stop saying "isn't that cute" and point out that this behavior has crossed the line from childishness into insanity. They could easily offer an easy opt-out button on their site. But when someone throws away a half billion PER YEAR to make a point, some adult should make present management get back on their meds.
I've always disdained the exorbant fees newspapers charged for classified advertising, so I won't lose any sleep as they slowly die out of existence.
A smart portal, ie; Yahoo/AOL would make a play for CL when the time's ripe, as CL will have a majority market penetration in the classfied advertising vertical.
Ron Aaron San Antonio, Texas