Is Craigslist Like Wal-Mart?

from the kinda-puts-a-different-spin-on-things dept

Craigslist has a reputation for being a big, friendly community — and the newspapers who can’t deal with the competition are simply out of touch and slow to react. However, someone from within the (alternative) newspaper business is shooting back and claiming that the idea that Craigslist is all about a cuddly community is “bullshit.” Instead, Craigslist is to local newspapers like what Wal-Mart is to local mom-and-pop shops:

“In many ways, he’s like a Wal-Mart – yeah, landlords get cheaper real estate ads, and consumers find some bargains, but the money all goes out of town. And he puts nothing back into the community: He doesn’t, for example, hire reporters or serve as a community watchdog.”

Definitely an interesting way of looking at things — though, again, it does come back to being a competitive issue. If that’s what people want, is it a problem? Why aren’t the local papers already offering similar services in their own communities that pre-empt the demand for Craigslist? In places that Craigslist doesn’t serve, it seems like the local newspaper should still have a ton more name recognition than Craigslist (who, in spite of its popularity with the geekset, isn’t that well known outside of its core cities).


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Comments on “Is Craigslist Like Wal-Mart?”

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39 Comments
Paul says:

Re: No Subject Given

I just tried to advertise on the Gaurdian, and in order to get 10 words in their paper to sell something in the book section it would have set me back $27.00. How’s that good for the community? The journalist is obviously afraid of a little competition and is turning his frustration into an editorial piece. He also has an ad of a naked woman on his page which links to an even bigger picture of said woman. Now I’m not a prude, but I’m not sure how having a naked woman on his article is good for my community. Might sell more papers though.

David says:

Re: Money going out of town...

…by which I take the writer to mean that the revenue generated by those those postings on CL for which a fee is charged comes back to further inflate our real estate market here in San Francisco (the CL hometown) rather than staying in the local community where it originates.

But the more interesting thing to me is that CL really only charges for employment ads, and even that only in some markets. In most markets there is not currently a fee for any posting at all. That seems to me to be a very different business model than Walmart, which to my knowledge does not have an institutionalized policy of giving away its inventory.

As to those markets where CL DOES charge, that fee ($75 per employment category, with most requiring two or three categories to get get full exposure to the widest readership) is not measurably less than that charged by local papers. I recently ran an ad in CL which required that I pay $225 ($75 x three categories) for a one shot posting. I also ran it in a local paper, which cost me $195 for seven days. For reasons probably having to do with the fact that my employee needs skew to the IT literate, I received higher quality responses and resumes from CL, but I received many from the hard copy too.

So in fact, CL either provides a product that is free, or one which is priced competitively with other available resources. But because it occupies an entirely different medium (which most local newspapers haven’t figured out how to efficiently exploit yet) it’s no competition at all.

Walmart? That’s a spurious comparison. But I don’t think CL is really “cuddly” either. It’s a resource, well conceived and positioned. It also seems to me that if Gannett, Tribune or Knight Ridder really want to compete with CL in any of the 1200 local papers they collectively own in the US (out of a total of about 1500), they certainly could do so. That they haven’t so far done so, probably reflects more either a lack of resolve, or more likely, a simple business judgment call that CL doesn’t pose a real threat. But the idea that an upstart computer geek like Craig Newmark is “walmarting” local newspapers, most of which are owned by multi-billion dollar asset corporations, with a free classified website is laughable.

Anonymous Coward says:

No Subject Given

When the local mom and pop store starts selling jeans, hair dryers and groceries in the same store then I might go there. Otherwise I’ll save gas and harmful emissions by going to one place.

See, I’m helping to save the planet. There’s always some bit of good in a situation…just depends on how you look at it.

OBM (profile) says:

No Subject Given

“…serve as a community watchdog”
the mainstream (and even local) press hasn’t been that in over a decade.
they jump on bandwagon hype stories and drop them as soon as they’re something new and shiny.
I wouldn’t trust the press to keep my place in the lunch queue let alone show any integrity when it comes to looking after the community

mateo says:

No Subject Given

Craigslist doesn’t purport itself to be in the newspaper business so I don’t get the analogy. True, newspapers generate quite a bit of revenue from classified ads, but I don’t know how much of that money goes directly back into the community. I’m a graphic designer at a relatively small newspaper in Washington and our corporate owners are located in Iowa… last time I checked, that state isn’t in the vicinity. Besides, Craigslist is a better service for individuals so its no surprise that more people turn to it rather than their local newpapers.

spam says:

local newspapers?

hah. Knight-Ridder & similar news organizations just push out the same boring ass websites to different towns. The ‘local newspapers’ are usually crap.

Nothing is stopping them from putting up their own craigslist-like ad system locally, except the overpaid idiot shortsighted executives running the papers from halfway across the country.

Dave (user link) says:

weird...

um… isn’t craiglist offered for FREE? and I don’t see ANY ads from third party people like on newspapers.

Question for anyone.. how does craiglist make money? I know they do have backing of ebay, but why does ebay back it when it’s clearly a money losing proposition. nobody gets charged for selling. they don’t send spam mail to my email.

thought?: maybe something to do with other services they have? anybody know?

LS says:

Re: weird...

The only thing that CL charges for are job postings in 3 cities:

-San Francisco ($75 a category)
-New York ($25 a category)
-Los Angelos ($25 a category)

Everything else is free, including job postings in other cities.

The article is totally without merit.

CL generates enough revenue to flourish with just job postings. Lastly, CL did not sell out to eBay, but, a former CL employee sold his stock options to eBay; eBay wanted in, not the other way around.

WarrenG says:

That's crap

I sold my car, my condo and other furniture on Craigslist. The money I saved on agents fees, I was able to spend on other things IN MY LOCAL COMMUNITY. In fact, this was one of the whole reasons for selling my condo myself – so that my money WOULDN’T be going out of my local community. This guy’s on the same stuff that Darl McBride is on when he refers to the GPL as communist, and anti-American. If supporting Walmart can be construed as unpatriotic because of their deep ties to China, then surely supporting a resource such as Cragslist should be considered patriotic, by comparison at least. Also, what about the Craigslist Foundation – a non-profit foundation set up to help other non-profits establish themselves? Seems that Craigslist is doing far more good than harm to local economies. No, comparing Craigslist to Walmart is like comparing Mother Theresa to George Bush.

tony says:

Craigslist like Wal-Mart.....step outside the box

Why refer to craigslist as a HE? As if HE is there typing all the pos into HIS list. Local newspapers need to realize that it is 2006 and not 1943. It is not Craigslist who is bringing down local newspapers, it is technology and you need to deal with it. If you do, and you find the niche you need to keep a newspaper open, then so be it. Quite frankly…Why does one need a newspaper??
Regardless, people will always have birds and hamsters, so newspapers will always serve some kind of function. Unless of course Craig hires someone else to fill out his lists for him, and comes to everyones house to collect guano.

Don Dodge (user link) says:

Craig Newmark of craigslist is a unique and humble

I interviewed Craig earlier this week for my blog. He is a “salt of the earth” kind of guy. He could have easily been an Internet Billionaire, and still could be any time he wants to be. To get a better view of Craig you can read my interview here.
http://dondodge.typepad.com/the_next_big_thing/2006/01/interview_with_.html

Sacha Vekeman (user link) says:

Paper is not evil

I wanted to counter most of the posts by showing the readers the two sides of the coin. First of all I need to tell you that I am European based, and secondly, I have worked at both sides of the fence: printed classifieds (as an internet manager launching the Belgian classifieds portal: Easy.be) and in many pure-play internet services companies (so called new economy companies).

Let’s start with saying print is not evil. Many media groups that run a classifieds business are indeed only interested in the volume of paid listings generated by a mass audience. They don’t care about the community behind the audience.

On the other hand I have to say European media groups do care about profitability and staying in business. The cost of paper and pre-press is high, and the margin on a $20 listing in a local newspaper is narrow! It is impossible for these media groups to go for a ‘free-only’ model. Keep also i mind that an ‘internet’ only model is not optimal, as the coverage of free-local-papers is about 80% in Belgium, while the Internet penetration (broadband) is hardly reaching 50%. With other words, print does get your ad to an audience, and the response rates are high!!! Printed listings also get sometimes 20 to 30 reactions… Try it… Also remember that media groups employ many, many people. Media business is people business, as only people make the news, people create the ad and articles and people run the printing machines… who are paying them?

Secondly, I have been working in new-economy businesses, going out of business, while the media group knows how to stay in business. I am still wondering why ‘free’ is such a killer word… I prefer the saying ‘value for money’ and with certain print classifieds editions you get value for money.

Last but not least, Craigslist is not so flexible, adaptive and agile as an new-economy company ought to be. How long did it take Craig Newark to decide Jobs listings had to be paid for… 1 or 2 years, maybe 3 or more. A media group indeed acts as a dinosaur, but thinks in cycles of 2 to 3 years to launch new or paid-for services… I don’t see that big difference.

Anyway, I am a big fan of Craig Newark and I wish him the best. I do think tahttechnology is changing the classifieds paradigm, and not the ‘free’ model as such.

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