Craigslist revenue, profits soar

Posted by on Apr 30, 2010 in Marketplace, Note from us

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ALTAMONTE SPRINGS, FLA. — Craigslist, the global classified advertising site, will generate an estimated $122 million in revenue and profits of $88 million to $99 million in 2010, Classified Intelligence Report disclosed today.

In its latest detailed report about the worldwide “free classified” site that has changed the landscape of classified advertising, Classified Intelligence Report from the AIM Group estimated Craigslist’s revenue will grow 22 percent in 2010, up from $100 million in 2009. More than half the company’s revenue comes from recruitment advertising, while 30 percent comes from “adult services” ads — thinly disguised advertising for prostitutes — and about 17 percent (almost $21 million) comes from apartment ads in New York City, the AIM Group estimated.

The 47-page report includes the first detailed published analysis ever of Craigslist’s expenses, which include technology, bandwidth, personnel and legal fees. Craigslist Inc., parent of Craigslist.org, is locked in a fierce legal battle with EBay, its only outside shareholder and its largest direct competitor in the U.S. and Canada.

“Craigslist claims to have a ‘relatively non-commercial nature, public service mission and non-corporate culture,’ but in reality it turns so much profit that it’s a gold mine for its owners,” said Peter M. Zollman, founder of the AIM Group. “Per employee, it generates more than $4 million in revenue and profits of $2.9 million to $3.2 million — staggering numbers any way you count.

“By taking a comprehensive look at Craigslist’s revenue and expenses, and the many issues the company is facing, we illustrate the lucrative and changing nature of the classified-advertising industry.”

The AIM Group’s annual report on Craigslist, which is available at AIMGroup.com for $395, provides revenue estimates for Craigslist’s “adult services” ads; recruitment ads in each of the 19 cities where the company charges for job postings, and for apartment ads in New York. It outlines the company’s revenue growth; analyzes Craigslist’s costs, opportunities and challenges, and provides extensive background on the company’s legal fight with EBay. It also takes a detailed look at EBay’s U.S. and international classified advertising operations and growth, along with more than a dozen other competitors to Craigslist.

“We’re astonished at the explosive growth Craigslist continues to show, even in a very tough economy,” said Jim Townsend, editorial director of Classified Intelligence Report and the AIM Group. “For 2010, its ‘adult services’ revenue will be three times the revenue it generated in that category in 2009.”

Click here to buy the report.

The report also includes:

— An extensive overview of Craigslist, which grew from an e-mail list founded by Craig Newmark 15 years ago.

— A 15-point prescription for successfully competing with Craigslist and other classified publishers.

— A recap and timeline of the ongoing legal battle between Craigslist and EBay.

— A review of Craigslist’s plans, scuttled in early 2001, to become a community much like Facebook, which launched three years later. (“Oh, what could have been,” the report notes.)

— A look at other successful classified advertising sites and companies, including Oodle and Kaango in the U.S.; Kijiji, Loquo, Gumtree, Marktplaats and others owned by EBay as it expands its classified footprint; Schibsted’s successful Blocket marketplace model, now in 10 countries, and more.

The AIM Group began estimating Craigslist’s revenue in 2003, when it projected revenue of about $7 million. The company, parent of consulting group Classified Intelligence, tracks Craigslist’s revenue through the most basic approach — counting ads. Its complete methodology is detailed in the report.

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About the AIM Group: The AIM Group, formally known as the Advanced Interactive Media Group LLC, is the world’s leading consultancy in interactive media and classified advertising. It publishes Classified Intelligence Report, a continuous advisory service often called “the bible of the classified advertising industry.” The AIM Group works with leading media companies, broadcasters, dot-coms, yellow-page publishers and technology companies. It provides strategic and tactical consulting; sales training; proprietary and published research about interactive media, and other services. Founded in 1998, it is based in Altamonte Springs, Fla. For more information call (407) 788-2780 or see http://AIMGroup.com .

Written by Peter M. Zollman

Peter M. Zollman brings more than 35 years of media experience to his role as founding principal of the AIM Group / Classified Intelligence Report. He has worked with a wide range of media companies, dot-coms, technology providers and start-ups to develop and expand successful interactive-media services. He is based in Altamonte Springs, Fla., near Orlando.

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