Is Craigslist Costing Bay Area Newspapers $65 Million Per Year?

from the seems-like-a-bit-much... dept

A new research report has come out with the eye-catching claim that Craigslist's job listings (the only thing Craigslist actually charges for) is costing San Francisco Bay Area newspapers between $50 and $65 million in revenue. While there's no doubt that Craigslist is making newspapers lose some business, the numbers look a bit questionable. First of all, it appears to assume that every job listing on Craigslist (at $75 a pop) would have gone to a newspaper otherwise (at $700 a pop). This is highly unlikely. Also, it's troublesome whenever a report comes out claiming that some newer, cheaper offering is "costing" legacy players revenue. That suggests the responsibility is with the upstart for "taking away" money from the incumbents -- when the real fault is with the incumbents for not (a) looking for ways to cannibalize their own businesses before some upstart gets the chance and (b) not responding quickly when the challenges appear. Craigslist isn't costing these newspapers anything. The newspapers are simply failing to update their business models to changing market conditions.
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    Robert (profile), 4 May 2006 @ 11:14pm

    $700 for a job listing? That seems rediciously high compared to the cost of my local newspaper.

    Perhaps what the newspapers should do is allow for more of their content to be put on their website. Charge a fee similar to Craigslist for an "online only" job ad, and have the regular job listing placed in both the paper and the online listing. Or provide an incentive to do both the paper and the online listing. I'm sure that the newspapers could come up with a system that allows them to retain the traditional newspaper job listings while forming a market online as well.

    reply to this | link to this | view in chronology ]


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