Jim Buckmaster told weekly technology law
podcast OUT-LAW Radio that his business
was not responsible for publishers' problems. He said that a focus
on money and profits has in fact damaged their business.
"I think it's exaggerated to say that
Craigslist has had a devastating impact on classifieds revenue,"
said Buckmaster. "Newspapers as an industry are still twice as
profitable as the average United States industry."
Newspapers had a pre-internet monopoly on
readers' attention which meant that classified advertising became
an extremely profitable part of their business. Since the advent of
classified advertising, online margins have been eroded. Since the
almost entirely free Craigslist became utterly dominant across the
US, publishers say margins have plummeted.
"Journalism as practiced at newspapers has
been hurt by an excess of money over the years as you've seen
newspapers bought and sold and consolidated into large chains run
by corporate managers to maximise profit, and increasingly over
decades have resorted to running wire stories, putting an
ever-greater proportion of advertising into their newspapers and
shying away from writing hard-hitting stories about corruption in
high places," said Buckmaster. "The financial position of
newspapers has not declined, it has more plateaued."
Craigslist is run on unique lines. Though it
is a company and it does generate profits, the aim of Buckmaster
and company founder Craig Newmark is explicitly not to earn money.
"Our goal is to maximise utility for users, so we concentrate on
doing what users ask us to do and little else. We do want to run a
healthy business and we do have a healthy business, but beyond that
maximising profits and revenues has never been a primary goal. It's
unfathomable to the financial community and Wall Street, it's
antithetical to their whole world view, it's sacrilegious."
Buckmaster was in the UK to talk about Silicon
Valley culture to the Edinburgh University Entrepreneurship Club.
His advice to entrepreneurs was to be patient.
"Patience was something which put us in a
subset of one during the initial internet boom when the emphasis
was on trying to grow to great size as quickly as possible by any
means possible," he said. "The notion of internet time,
everything's moving quickly – we found the contrary, we weren't in
any hurry at all and we've never done anything to accelerate the
growth in terms of advertising or anything like that."
"You don't have to be in a big rush as long as
the trend is going in the right direction, and if you keep your
costs low it gives you far more flexibility than you otherwise
would have," he said. "Once you have outside investors you're not
in control of the company and the range of options you'll have will
be very circumscribed."
While almost all of the commercially minded
dotcom companies of the first internet boom went bust having never
made a profit, Craigslist has been profitable for seven years,
Buckmaster said.
It is in the top 10 English language websites
by traffic, it serves six billion pages a month to 10 million
users, yet it only employs 23 staff. It is those low costs which
have kept it in business.
"It was fairly ironic, 100% of dotcoms were
geared toward trying to achieve an IPO and make a lot of money and
99% or more of those companies went bust without making a nickel,"
said Buckmaster. "Craigslist was never about money, and yet we were
one of the very few that came through the bust and have done well
year after year."
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