For any website today, the major purpose of its existence is to create revenues. Developers adopt several measures, such as banner ads, sponsored content among other things to make money out of their website.
However, what if we told you that there exists a website, which reaches more than 2 billion page views every month and has no ads on display? You’d be surprised to know that we’re talking of the famous- Craigslist.
People have wondered as to from where the company brings in revenue, especially when it has no ads, and it doesn’t charge people to post ads. So, how does Craigslist make money after all? Let’s find out.
In fifteen years since its inception, Craigslist has become one of the most valuable websites in the world, and it has managed to achieve this without a real source of income. Having said that, Craigslist has a turnover of billions of dollars and it surprisingly employees only 30 employees. So, how is that without showing any ads, the website manages to make such a boatload of cash? This brings us to the major income streams of Craigslist.
Craigslist Income Streams: The website makes money only through a handful of revenue streams. For instance, it charges as modest as 25% to post job-listings in six major US cities. It charges $75 for posting job-listings in San Francisco. Apart from that, it charges a meager $10 to post an apartment rental in the city of New York. Surprisingly, these are the only ways from which all the revenue flows in.
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This propels questioning the business model of the website. After all, the main aim of any business is to make money. However, Jim Buckmaster, Craigslist’s President says that making money is not Craigslist priority. So then, what is it?
Buckmaster says that the reason Craigslist remains ad-free, even today, is because it aims to provide the best experience to its users. Making money is not its priority. The company fears that advertisements would drastically hamper the quality of the website. In fact, the board members have deliberated on this for years, and they’ve always agreed to keep Craigslist ad free.
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How Is It Still Running?
If making money is not a business’ priority, then how is it still surviving? How is it that despite a limited number of revenue streams, Craigslist continues to thrive? What we usually end up seeing is that Craigslist has no ads. However, what we often forget is the number of users that are connected with the website. To give you a fair idea of the same, one in every three Americans are registered on Craigslist and have been using it since its inception. It racks up more than 2 billion page views each month, and it continues to be a reliable source for employers to find the right employee. As a result, all major firms in the US and around the world, list job openings on Craigslist, and end up paying a small sum. However, one needs to note that Craigslist has never made a profit, which is quite understandable.
(Image Courtesy: LifeEdited)
Effect On Newspapers
Craigslist has hit the newspaper classified business in a bad way. More people now rely on posting a free ad on Craigslist rather than paying money to advertise in newspapers. Apart from that, newspapers don’t quite have the reach as Craigslist’s.
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Do you often use Craigslist? Let us know in the comments below.
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