How Does Craigslist Make Money? (2022)

Last updated: May 23, 2020

Company: Craigslist, Inc.
Industry: Classified advertisements forum
Founder: Craig Newmark
CEO: Jim Buckmaster
Year founded: 1995
Headquarter: San Francisco, California, United States
Number of Employees (2017): 50
Valuation (2017): estimated $3 Billion
Annual Revenue (2018): estimated$1.034 Billion

Products & Services: buy/ sell stuff | jobs | housing | services | events
Competitors: Facebook marketplace |Letgo | Hoobly | OfferUp |Oodle | Recycler | eBay

Introduction to Craigslist, Inc.

One of the most successful advertising websites of all times is Craigslist. Craigslist was initially created and founded by Craig Newmark, an American internet entrepreneur, and philanthropist. The ideal was first initiated as just a “side-gig” that eventually flourished into a $3 Billion company.

Although Craigslist is considered a non-profit organization, the company had registered itself as a profit organization in 1999.  In the same year, Craigslist purchased a domain to protect its name brand and the number of subscribers that were associated as a member.

Since its initial launch, Craigslist continued to expand its outreach and began to cover more extensive areas and cities, communities, etc.

For 24 years, the official Craigslist website theme is considerably the same. Jim Buckmaster argues that changing the website theme or interface could jeopardize the quality of the website. However, improvements were progressed, and more sections were added to the website, which includes international countries. Craigslist has covered so many regions that it has now attained a professional advertising platform presence at a global scale.

According to Forbes, Craigslist has over 55 million monthly visitors with US, Japan, Canada, and Australia being their top 10 users by geological location. With a list of subscribers with that type of magnitude should be able to generate revenues that exceed beyond company expense.

According to a recent research study by Advanced Interactive Media (AIM) Group, Craigslist makes an annual revenue of over $ 1 Billion. AIM further concluded that Craigslist makes most its revenue from the US markets.

The following article provides an overview of Craigslist revenue model, and the specifications of how does Craigslist makes money.

Understanding Craigslist Revenue Model and the Core Operations

Peer to Peer Interaction

Craigslist business model is based on a P2P (peer-to-peer) or A2P (Agency-to-peer) or A2A (agency-to-agency) model. Think about Airbnb that works on similar peer to peer model. This means that anyone on the platform can view advertisements in any of the district zones, region, state, or countries.

Customer and community interactions help to create potential channels that increase traffic flow to the Craigslist website. This is funneled through “word of mouth” or “through references.” It creates new potential revenue streams and an addition to the Craigslist database that can be utilized for promotional purposes.

The considerable amount of exposure through active channeling communities, accounts, and rare-users help build new potential signups, account activation conversions, and increase the platforms usage popularity and consideration.

Geological Locations based Ads

The platform is built to serve individuals with “close-range-proximity,” meaning that users are recommended to associate in dealings that are close in distance or location. This system has been put in place to help avoid users from any misguiding promises or possible fraudulent activities that may be a potential threat to an honest user.

Users can navigate to other regional locations to review advertisements from other areas that are not in “close-range-proximity.” Users can conduct dealings with such distant advertiser, even though this practice isn’t recommended.

C-Plus (Licensed App) for smart devices

In competition with new age mobile-based platforms like OfferUp and letgo, Craigslist developers introduced C- Plus application (ideally for smartphones and tablets) for those individuals that happen to use the platform very frequently. C- plus is a 3^rd party mobile app gateway to the original craigslist website.

The application program has been designed for users to browse, search, and make posting on Craigslist, smoothly, effectively, and for free. (free listing for qualifying ads)

The C-Plus alone helps to initiate and deploy daily activities that include postings from relative and active users within a specific area or distance. The application is accessible once downloaded through an app store.

C-Plus application program not only helped to align solidified ads for active and frequent users, but this helped to solidify daily transactions from daily postings and help generate revenues for the company.

How Does Craigslist Make Money?

Fee-Based Service Structure

Craiglist charge a fees for posting advertisements. Their revenue is generated through a vast collection of classified sections.

The following includes Craigslist fees structure;

Basic Structure Overview

All postings on Craigslist are free, except for the following;

Final Word

Craigslist leaders are making an enormous amount of profit but have been keeping their financials hidden and away from the public view. To conclude, Craigslist’s CEO J. Buckmaster maybe undergoing with new business developments to enter new emerging marketing and provide new channels to alternative opportunities in the advertising industry.

With over 55 million users, financial advisors and analysts conclude that since the brink of their launch, Craigslist was able to generate tremendous revenue using their existing business. Through the easy and simplified advertisement fee charging system, Craigslist was able to establish a vital presence.

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