Craigslist and its Business Model
Case Code: BSTR340
Case Length: 26 Pages
Pub Date: 2009
Teaching Note: Not Available
Organization: Craigslist, Inc.
Industry: Online Classifieds
Countries: USA; Global
Themes: Business Models, Business Model Innovation, Social Innovation
Abstract Case Intro 1 Case Intro 2 Excerpts
The "No-Frills" Site
As of May 2009, Craigslist was the ninth most popular site in the US, according to Alexa. It was one of the leading online brands in the US online classifieds market and was considered as an online community where users could exchange information, buy or sell items, seek jobs, or find friends.....
Low-Cost Business Model
Craigslist followed a low-cost business model, the main objective of which was to satisfy users and provide a service based on trust and simplicity. According to the company, its goal was not to maximize profits but to offer localized service which was free as well as convenient for users...
According to the promoters, Craigslist's business was non-commercial in nature and Newmark perceived it to be a community-based model rather than a for profit business. Newmark who had founded Craigslist as a hobby did not focus on profits as his aim was to serve the community by providing a free service...
In the era of the Internet, many people turned to online classified ads instead of to newspapers to find the information they needed. With the online classifieds market booming, Craigslist had to face some tough competition from some major Internet giants as well as smaller, local, and regional players (Refer to Exhibit V for competitors of Craigslist)...
Experts praised Craigslist for becoming one of the leading online classified sites in the US and also having a global presence. Its good performance during recession attracted the attention of industry observers...
Analysts felt that though the Craigslist website was comprehensive and simple, it had certain loopholes. For instance, the site was not attractive; it lacked a proper design and was loaded with irrelevant listings which were organized by date instead of function...
Despite the protests against some of its services, the popularity of Craigslist continued to grow as many users continued to flock to the site to get valuable information. In February 2009, Craigslist was ranked seventeenth in the list of 'Top 50 Website Properties in US' released by comScore Media Metrix (Refer to Exhibit VII for top 20 website properties in the US)...
Exhibit I: Page View Ranks (Data as of October 2006)
Exhibit II: Craigslist Unique Visitors: April 2008 - April 2009
Exhibit III: Screenshot of Craigslist
Exhibit IV: List of Items Prohibited for Sale or Trade on Craigslist
Exhibit V: Competitors of Craigslist
Exhibit VI: Awards and Accolades
Exhibit VII: Top 20 Website Properties in US
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