Craigslist Meets the Capitalists

Topics Venture CapitalIndustries Technology, MediaJim Buckmaster, the chief executive of Craigslist, caused lots of head-scratching Thursday as he tried to explain to a bunch of Wall Street types why his company is not interested in "monetizing" his ridiculously popular Web operation. Appearing at the UBS global media conference in New York, Mr. Buckmaster took questions from the bemused audience, which apparently could not get its collective mind around the notion that Craigslist exists to help Web users find jobs, cars, apartments and dates ?- and not so much to make money.

Wendy Davis of MediaPost describes the presentation as a "a culture clash of near-epic proportions." She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn't, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). "That definitely is not part of the equation," he said, according to MediaPost. "It's not part of the goal."

"I think a lot of people are catching their breath right now," Mr. Schachter said in response.

The Tech Trader Daily blog ponders this question: "If YouTube was worth $1.65 billion, who knows what Craigslist would be worth if Jim and [site founder] Craig Newmark ever considred becoming ?- what's the word? ?- capitalists."

Craigslist charges money for job listings, but only in seven of the cities it serves ($75 in San Francisco; $35 in the others). And it charges for apartment listings in New York ($10 a pop). But that is just to pay expenses.

Mr. Schachter still did not seem to understand. How about running AdSense ads from Google? Craigslist has considered that, Mr. Buckmaster said. They even crunched the numbers, which were "quite staggering." But users haven't expressed an interest in seeing ads, so it is not going to happen.

Following the meeting, Mr. Schachter wrote a research note, flagged by Tech Trader Daily, which suggests that he still doesn't quite get the concept of serving customers first, and worrying about revenues later, if at all (and nevermind profits). Craigslist, the analyst wrote, "does not fully monetize its traffic or services."

Mr. Buckmaster said the company is doubling in size every year, as measured by page views and listings.

Larry Dignan, writing on Between the Lines blog at ZDNet, called Mr. Buckmaster "delightfully communist," and described the audience as "confused capitalists wondering how a company can exist without the urge to maximize profits."