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Posted
October 26, 2004

Craigslist and the Triumph of the Commons

A refreshing success story. Craig Newmark of Craigslist puts public service ahead of reaping big bucks.

Students of the commons would do well to study the design principles and ethics of Craigslist.com, one of the most popular online commons today. Craig has been getting a lot of press lately. Two good pieces include an October 23, 2004, article in the Washington Post, and an interview in (of all places!) the Southwest Airlines in-flight magazine, which is not available online.

Begun in 1995 by self-proclaimed nerd Craig Newmark, Craig’s List was initially intended to help San Franciscans find apartments, jobs, and community events. It was a small, private effort to be helpful — and it just took off. Despite no advertising — just word of mouth — the site quickly became an underground hit because it was such a friendly and effective tool for people’s everyday lives. You could put up an ad for an apartment or motorcycle, or put out a request for a rabbi for your marriage, or any other oddball query, and in no time at all, you could find what you needed. Now Craig’s List operates in 48 different U.S. cities and nine cities in Canada, Ireland, Australia and the United Kingdom. The site is among the top 15 Internet companies in terms of its traffic — more than one billion page views a month.

Most high-tech observers wonder why Craig Newmark hasn’t tried to wring more profit out of his site. It is a private company worth more than $10 million and employing a staff of 14. Internet financiers could make Newmark an instant millionaire if he wanted to cash in. But Newmark insists upon upholding “nerd values” — a sense of fairness, local community and non-commercialism. The only people who pay to use the site are those listing jobs; they pay $25 to $75. All other ads are free.

“We’re both a community service and a business,” said Newmark. “We don’t take ads — no banners, no pop-ups — basically as an expression of values. How much money do you need to make?” Newmark also believes in localism. He has deliberately structured the site so that each city has its own operations, with no links among them. That way, every city’s Craig’s List has an authentic local feel. Craig’s List is basically about trust. As Newmark explained: “Nerd naivete means you are trustworthy and you trust people. We now have a culture of trust, and the expectation of trust creates more trust.”

The site does does go after spammers and commercial advertisers who try to use the site. The site also has a flagging system so that users can object to an ad they find offensive; if there are enough flags, the ad is automatically pulled. Users are king. They can and do suggest new categories for ads. They are able to trust their fellow urbanites to find the things they need. And Craig is happy that he has a robust, healthy business with millions of devoted followers.

No tragedy of the commons here.