Posted on 12/01/2005 4:24:24 PM PST by churchillbuff
Craig Newmark's stubby fingers tap at the keyboard in an irregular, accelerating rhythm, akin to kernels in a microwave popcorn bag approaching peak heat.
Clack.
Click-clack.
Click-ity-click-ity-click-ca-click-clack.
Newmark peers into one of three computer monitors on his home office desk. The screen displays, in plain black-and-white text, the focus of Newmark's daily life -- much of it, anyway. It's in an e-mail program called Pine, favored by geeks of all ages, partly because it renders the mouse nearly useless. Pine users are, like Newmark, the type who derive an almost perverse pleasure from deleting a message by simply pressing the "D" key, rather than undertaking the laborious task of clicking on a trash can icon. Newmark pores over his inbox, which receives about 300 messages daily.
Clack. Clack. Clack. Click-ity-clack-ca-clack.
Every so often, he turns to the left, and his own moving image, collected by a computer video camera, stares back at him from a small laptop screen. Newmark is a young-looking 52, despite his nearly bald pate and stout physique. He wears a deep purple shirt tucked into black pants, fashionable trapezoid-framed glasses, and the perpetual awkward smirk of a middle-aged man who never quite let go of his nerdiness.
There's an e-mail from his nutritionist, who has analyzed data from the pedometer that inhabits Newmark's pocket. "Over the course of two-thirds of the year, I averaged 8,300 steps a day," Newmark says, "but in the last two weeks, I averaged 9,800." His sense of humor is so dry, it's unclear whether he is actually proud of this, and if he is aware that reciting it makes him sound like Rain Man. It's hard to believe this is the Craig Newmark, the Robin Hood of the Internet, who's now sending shock waves through the newspaper industry and becoming a major voice in a movement to reshape the media.
The offices of Craigslist, the mostly free classifieds site Newmark co-founded a decade ago, are less than a mile to the west, but he spends most of his workweek here, at the Inner Sunset house his girlfriend teasingly calls his "swank new bachelor pad." Newmark moved in in October, and his progress does much to reveal his priorities: The wall that will separate the bedroom from the bathroom has yet to be built, but two brand-new, widescreen televisions (one in the living room, one at the foot of the bed) are fully functional.
Newmark lightly rubs his index finger over the pink keyboard nub that programmers call the "nipple mouse." The arrow on the screen dashes from the left monitor to the right. A Web page shows Newmark the ads that have been "flagged" -- some users thought the posts were spam, fraud schemes, or other misbehavior. In the forums, where Craigslist community members debate and commiserate in an online free-for-all, Newmark acts as benevolent dictator -- the editor in chief, as it were, of Craigslist.org. He decides who's suspended, who's deleted, and who is relegated to the "Island of Misfit Threads" with a single click.
"This guy's a bigot," he says, pointing to a post that reads "my boss is a jew." Newmark adds: "I've seen him before.
"He's gone." Clack! "This guy is troubled, just a nasty piece of work. He's welcome as long as he behaves like an adult," Newmark says, in his best imitation of a junior high principal. "I've spoken about it with him ...." He trails off, moving to the next flag, which alerts him to a group spamming the erotic services section. Newmark blocks them from posting by clicking a button that reads "Sweep the Leg!," a jokey reference to an illegal kick by one of the bad guys in The Karate Kid. Two other Craigslist employees monitor the posts, but there's no simple way to pass on the knowledge Newmark has gained fighting spam, essentially by hand, for almost 10 years.
This is how the multimillion-dollar global corporation that is Craigslist Inc. remains operational: with the founder sitting at home for hours a day, pointing and clicking on a "Sweep the Leg!" button. Yet the consequences of this bare-bones behemoth's rise now stretch far beyond Newmark's home and the Craigslist community.
Almost by accident, Newmark built one of the Internet's most successful sites, creating a free marketplace for millions that continues to grow around the country and the world. Among the unintended consequences of Craigslist's growth, though, is that it's sucking away significant dollars in classified advertisements from already-struggling newspapers. Bay Area papers alone forfeit at least $50 million annually to Craigslist, losses that contribute to layoffs of dozens of reporters. As fearful publishers cut newsroom jobs, inferior news coverage is the likely outcome. Craigslist's devoted fans are unknowingly exchanging one public service for another -- trading away the quality of their news for a cheaper way to find an apartment. At the same time, Craigslist's executives won't disclose the amount of money they're pulling in.
Newmark now suffers from a moral dilemma: He feels guilty about helping cause job losses and poorer-quality papers, but he's excited to accelerate the decline of the big, bad mainstream media. He seems determined to remedy his sins against the media by changing it for the better, lending his name and dollars to a citizen journalism movement populated by J-school professors, idealistic techno-futurists, and so-called citizen journalists. A self-described news dilettante, Newmark believes his recent journalism-related work could be more important than Craigslist. Citizen journalism, though, may not be enough to plug the news hole created by his site's success. Newmark's well-intentioned campaign to repair the institution he inadvertently injured could very well be in vain.
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On the Saturday before Halloween, Newmark walks onto the open-air back patio of Reverie, the Cole Valley cafe he visits at least once every day. He wears his standard black cap, of the style favored by hip hop moguls and elderly golfers, and the top three buttons of his green shirt are unfastened. The furniture is full of droplets from the previous night's rain, so he heads back inside and asks the guy behind the counter for a dish towel. Reverie is Newmark's own little Craigslist-like community: The staff and regulars know him here; it's where he met his girlfriend and found an architect to remodel his new house.
He sits down and clasps his hands together, ready for the morning's challenge -- discussing how his community site came to deprive the newspaper industry of tens of millions of dollars per year, and describing what, exactly, he plans to do about it.
The average person who posts an apartment for rent on Craigslist has no clue that the decision affects her local newspaper. All she knows is that, by filling out a short form, she can attract a dozen potential renters to her doorstep that weekend. No fees, no spam, no annoying pop-up ads. The same is true for personals, used car sales, and, in most cities, jobs.
The hidden cost, though, is that newspapers (including SF Weekly) make their money largely, or solely, via advertising. Media businesses are cagey about revealing how much revenue comes from classifieds, but the percentage share is usually well into the double digits, and profit margins are high. A five-line, text-only ad for a used car in the San Francisco Chronicle costs $39 for 10 days. Compare that to Craigslist, which offers as much space as you need, plus photos, for free. With millions of newspaper readers choosing Craigslist, newspaper revenue losses are adding up.
The hardest-hit publications are in the Bay Area, which accounts for about one-quarter of Craigslist's traffic. The Chronicle and its competitors lose more than $50 million per year because of job ads that have migrated to Craigslist, according to a 2004 report by Bob Cauthorn, the former vice president of digital media at Chronicle Web site SFGate.com, who is now working on his own media venture, City Tools.
In the past year, the number of Craigslist Bay Area job postings per month has almost doubled, to more than 20,000.
The San Jose Mercury News alone misses out on $12 million annually in employment ad revenue because of Craigslist, according to recent estimates by Lou Alexander, who retired as the paper's advertising operations director two years ago. (Both studies accounted for the fact that not all Craigslist posters would otherwise have bought ads in papers.) A few million is a relatively small loss for Knight Ridder, the $3 billion chain that owns the Merc, but it's a fortune inside an individual newsroom. In November, Merc Publisher George Riggs cut 52 editorial and eight business employees, laying off the entire staff of community papers Viet Mercury and Nuevo Mundo and buying out dozens more in the Merc's newsroom. This saved the Mercury about $6 million in salaries by losing 16 percent of the editorial staff but offset only half of its Craigslist-related annual losses.
The Chronicle recently bought out 91 of an expected 120 employees, many of them in editorial.
"[Publishers] wouldn't say: 'Of 52 buyouts we offered, 17 of them were from Craigslist,'" says John McManus, director of Bay Area journalism watchdog site GradeTheNews.org. "But there's no question that some of these losses in reporters are due to classified ads migrating from newspapers to the Internet." As Craigslist continues its rapid expansion beyond the Bay Area, those staffing cuts could be a harbinger of things to come at newspapers across the country.
The trouble is, outside the media industry and its watchdogs, no one seems to care. U.S. newsroom employment fell by 1 percent last year, to a total of just over 54,000, according to the American Society of Newspaper Editors. It was the lowest number of editorial staffers since 1997, and judging by high-profile buyouts and layoffs at the likes of the New York Times and the Los Angeles Times, that figure will drop again in 2005.
Fewer reporters often means lower-grade news coverage. "When a newsroom suffers cutbacks, its journalism becomes less ambitious," says McManus. "There may be as many stories, but fewer have depth and include investigation." The lack of quality articles repels readers, and circulation and revenue decrease further, in a vicious cycle.
It's tough to convince the average reader that one of the causes of inferior newspaper articles was her placement of an ad on Craigslist instead of in the paper. And yet, in aggregate, the numbers make that case. "The public gets to save a few bucks on classified advertisements," McManus says, "but given the reliance of participatory government on newspapers, it may be no bargain at all for society."
With the free ads, I don't understand how craigslist generates income. Have I missed something obvious?
Revenue evidently comes mainly from the job ads.
http://www.craigslist.com/about/pr/factsheet.html
Tradeoffs are a bitch!
At one point last year the Marin IJ offered all motor dealers a deal of 15 adds, a day, 7 days a week, for $300 a month, after 2 months they were filling 4 pages of adds a day.
Then for some corporate reason they stopped, I assume it was taking advertisers from there other newspapers, now they are back to the normal 1 page maybe.
I do not cry for the newspapers, they were ripping off advertisers for years, now it has stopped.
GOOD.
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