• by Shankar Gupta , January 10, 2005

In a move to cut down on scams and frivolous listings, Craigslist, a popular online classifieds site, is considering charging a per-post fee for its real estate listings in San Francisco and New York City.

"We're being asked to start charging both by brokers ... and by apartment seekers," Jim Buckmaster, Craigslist CEO said. "As it is now, the volume of postings coming through those categories is just too high, and it's burdensome for all concerned."

Craigslist already charges for job listings in New York City, Los Angeles, and San Francisco. "In jobs, charging significantly improved the usefulness of that category," Buckmaster said. "It was the only way to keep out some of the drek that we were starting to see."

The "drek" included multilevel marketing schemes, work-at-home scams, and other "stuff masquerading as jobs," Buckmaster said. "They were just trying to trick people into paying 75 dollars." The real estate listings suffer from similar problems, according to Buckmaster. "In the New York apartment sections, we do have to work pretty hard to combat bait-and-switch kind of operations and the kind of fly-by-night apartment listing vendors who are just looking to sell a list of apartments that may or may not be available," Buckmaster said. "We do expect it to be cut down significantly." A ballpark estimate of the fee is a $10-per-post charge. Job postings in New York and Los Angeles cost $25 per post, and in the San Francisco Bay area, they cost $75.

The change is expected to take place March 1, but before any action is taken, Craigslist will solicit feedback from both posters and buyers. "Before we will make any moves on this, we'll be putting up a discussion board for all concerned parties in the category both from the brokers' side and the apartment seekers' side to make sure we are on the right track," Buckmaster said. "We make sure we really should do it."

But they aren't just looking on discussion boards, Craigslist founder Craig Newmark said. "I was in the East Village--I wandered into a brokerage and spoke to a guy there. I wandered into a coffee house and spoke to a couple of guys there. I got good feedback," Newmark said. "People in New York, mostly brokers, are asking us to charge them. It will improve quality, and that's something we worry about pretty much every day."

Charging a per-post fee could dull Craigslist's competitive edge with local newspapers, which also offer classified ads for jobs and real estate listings. According to a report released by Classified Intelligence LLC in December 2004, Craigslist cost newspaper advertisers from $50 million to $60 million in employment advertising revenues in the San Francisco Bay Area alone.

Classified Intelligence LLC's Editorial Director Jim Townsend speculated that if Craigslist started charging, brokers would begin to clamor for their ads to be separated from 'for sale by the owner' ads, or FSBOs. "As any newspaper classified manager will correctly tell you, brokers can't stand the thought of their listings coexisting with FSBOs," Townsend said. "If Craig is going to take money for it, he'll probably have to find out how to manage those sensitivities."

Buckmaster said that Craigslist is unconcerned with competition with newspapers' classified pages. "We don't view ourselves as being in competition with newspapers," he said. "In our minds, we're providing a public service, and we want that service to be as useful as possible."