Craigslist Likely to Charge Real Estate Brokers in New York
NEW YORK -- Craigslist is likely to start charging real estate brokers in New York in the coming months, the company's founder said this week.
Craig Newmark, the online classified and discussion site's founder and chief customer service representative, said the move to charge real estate brokers to post rental apartment listings would likely improve the quality of listings. Craigslist currently takes fees from employers posting job listings in San Francisco, New York and Los Angeles. All other parts of the site are free.
Newmark said that, as with all changes on the site, he would solicit feedback from users. The rule of thumb has been to charge those businesses that would pay much more to advertise elsewhere.
"Sometime in the near future, we have to engage in a discussion to do this right," he said of charging brokers. The fees would not apply to listings of real estate for sale.
Newmark said he does not plan on charging for most services on Craigslist, since he has little ambition to become extremely wealthy. He said banner ads and text listings such as Google's AdSense for Content would not show up on the site.
"Our whole philosophy is we're not going to charge for much," he said at an iBreakfast meeting at the Inman Real Estate Connect conference at The Waldorf-Astoria.
Newmark said his conversations with brokers and apartment hunters led him to conclude that some sort of fee from brokers listing rental properties would reduce the number of misleading listings on the site. Newmark said he personally contacts those found posting such listings and asks them to stop.
Craigslist has grown from its humble roots nine years ago as Newmark's personal e-mail list to friends that listed arts and technology events in San Francisco to a global classifieds juggernaut. The site boasts 1.5 billion page views and 6.4 million visitors each month. It has sites for 75 cities worldwide. The company has only 18 employees. Newmark said media reports pegging Craigslist's annual revenue at between $7 million and $10 million are accurate.
"We're not charging for everything we could," he said.
Online auction giant eBay bought a 25 percent stake in Craigslist in August, after buying shares in the company Newmark granted an early employee. While regretting the loss of any control, Newmark said, "we share a similar moral compass and that's a big deal."
Newmark said eBay has not gotten involved in Craigslist's operations. He added that Google is another company he feels shares Craigslist's values.
The popularity of Craigslist, where users can find everything from apartments to jobs to dates, has hit the traditional classified business hard. A study by Classified Intelligence found that in San Francisco alone, Craigslist has taken from $50 million to $65 million of job-posting revenue from local newspapers.
Newmark disputes the notion that Craigslist is the biggest threat facing newspapers. He said a bigger threat is blogs and alternative news sources giving rise to a citizen journalism movement that erodes the power of traditional media as gatekeepers of information. Recent scandals, like the retracted report about President Bush's National Guard service by "60 Minutes II," have further eroded the public's trust in media, he said.
Newmark thinks the key to Craigslist's success is not solely attributable to offering free services.
"Somehow, we've created a culture of consumer trust on the site," he said, noting that Craigslist was used to find a kidney donor.
Watch the Interview: DM News talks with Craig Newmark about Craigslist at www.DMnews.com/video.
Brian Morrissey covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters