May 13, 2008
In defence of Craigslist
It can be unnerving to talk to Jim Buckmaster, the chief executive of Craigslist, particularly if you work for a newspaper. I did so once, in his apartment in San Francisco, and it was a memorable experience.
It was partly because of what he said - essentially that the online classified ads venture founded by the eponymous Craig Newmark would continue to scoop up the advertising that used to be the lifeblood of city and local papers.
It was also because Mr Buckmaster talks a bit like the leader of a cult. When asked why Craigslist is doing something - or is not - he tends to gaze into the distance and claim merely to be following the wishes of users.
Richard Waters neatly captured Mr Buckmaster’s android-like conversational style in this quote in the FT:
“People like ‘free’. If there’s no use in charging from the users’ point of view, we don’t see any use in it.”
So it is easy to feel that Mr Newmark and Mr Buckmaster are, as Mr Buckmaster phrases it, “socialist anarchists” trying to destroy an industry. The fact that their site is largely free and neither of them is rich only adds to this notion.
The two men have now got caught up in a tussle with eBay, which amiably acquired a 28 per cent stake in their company in 2004 but has displeased them by launching a classified ad site called Kijiji in the US.
Mr Newmark and Mr Buckmaster add to this feeling by claiming unconvincingly that the the problems of newspapers have less to do with tbe advent of free classifieds than with inadequate management and falling readership.
Actually, the sinking feeling at many city newspapers now has a lot to do with the fact that they used to monopolise the market for local classifieds and have lost control.
But blaming Craigslist for this is like blaming the sun for making you hot. As soon as the internet came along, it was only logical that the price of classified ads would fall to the marginal cost of distributing them ie zero.
If Craigslist had not done it, someone else would have. The fact that newspapers were financed to produce a public good - local news - but then lost their means of support is unfortunate but not Mr Newmark and Mr Buckmaster’s fault.
There is a distinction here between content and classifieds. Some evangelists claim that all songs, journalism, videos etc ought to be free on the web. That means that they should be distributed at below the cost of production.
Force majeure may dictate that they are distributed free - in the hope of getting advertising revenues - but there is no reason why this needs to be so. In the case of classifieds, however, free is the logical, and irresistible, price.
