Craigslist to Top $100 Million?

As newspapers struggle with declining ad revenues online classified ad site Craigslist is forecast to exceed $100 million revenues this year. That’s a whopping 23% increase of last year and its bottom-line is likely to be even healthier. First launched in ’95 as a email list the company was quick to undercut newspapers and appeal to a wider audience. Newsprint still dominates but over the last decade has seen its revenues drop 50% from $20 billion in 2000 to $10 billion last year.

Employment advertising, once the a mainstay of the newpapers is expected to account for some 85% of Craigslists revenues which leaves significant potential for future growth in other areas. It is also worth noting that 40% of their revenues comes listing in just three major cities; New York, San Francisco and Los Angeles. Again this leaves significant opportunities for further growth.

Craigslist employs just 30 people!

Sony Reader to Carry Adverts

New Media Age reported that Sony is likely to soon include third-party advertising opportunities on its Sony Reader as more publishers come on board. The devices is claimed to have sold over 300,000 units globally and today is seen by many as the opponent to Kindle and outside the US its often viewed as the only offer and certainly the only device that can render DRM epub today. However, as other devices adopt the Adobe ACS4 toolkit it position as the only epub device will soon be negated.

So why adverts and how will they appear? Will Sony discount the device in line with the ad revenues expected or publishers use it as a sampler similar to the Kindle? Can we get an ad free device at a premium? Are ads coming to accomadate newspapers, magazines and a larger reader – afterall Kindle has 3 models and Sony only has two. Are ads part of a larger programme to be wireless and therefore offer the ability to not only connect without the Adobe Editions mothership but also transact direct from the Sony reader?
Steve Haber, president of Sony Electronics’ digital reading business division, is reported “Advertising is not part of the business model at the moment but I would imagine that when it comes to periodicals, newspapers and magazines, those businesses are built around the advertising model so I would imagine it going in that direction.”

So what does the ereader want to be when it grows up?

Perhaps it can take on some of the business that Craiglist is now turning away. The US classified ads website says it will remove its erotic services category. Apparently, it promotes prostitution and prostitutes and clients use the site for illegal sexual encounters.

Several law enforcement agencies across the US have threatened the management of Craigslist with prosecution and last November Craigslist announced a deal with 40 state attorneys general that said it would charge for erotic services ads and require advertisers to use a credit card for payment.

In place will be a new closely monitored adult services section.

Harnessing the Publishing Network

The new market challenge is not traffic but turning networks and their traffic into money. Anyone can dream up a new service, or feature, but making it pay its way can often be hard. People often think that business models will remain the same or similar and those sales will grow expediently to accommodate all. The reality is that change brings new challenges that often confront the existing models.

What was the result on the music sector from the changes that the many P2P players such as Napster and Kazaa brought? Not only did their change the format, delivery, the breadth and range of tunes available and price perception, but ask where all the High Street music stores are today? When iTunes entered they found a way to channel sales and collect money. iTunes succeeded not because of the iPod but because Apple understood how to make money out of the latent demand for tracks. It joined the dots between consumer demand, an aggregated online repository and download service and an iconic device – simple but the best are always that!

When we look at newsprint we see new entrants in the form of the Internet news alerts, news aggregated services such as Google , the emergence of advertising options such as Craigslist and the new reporter - the blogger. Some newspapers will stand on the shore line watch the incoming tide and close their eyes. They can’t envisage the world without the authoritative watchdog journalist, printed copy and the profits they previously enjoyed. But the Internet doesn’t respect tradition it can democratise news and enable it to be not one way but a two way experience.

People now demand ‘my news’ tailored to meet their needs and tastes and they can do it in a heartbeat. Although the online subscriptions lights continue to flicker it’s only for a few who can command a price, for what is in the main, public domain news. The trick newspapers failed to do was to offer a customised service across newspapers and newspaper empires, but if network collaboration wasn’t in their dictionary it was in Google’s and Craigslist’s.

The Internet is about money and finding ways to make money from it is the game. Google was not the first search engine nor necessarily the best at the start, but what it understood was networks and how advertising revenues could be driven from people’s searching habits. It helps consumers find stuff on the web they could never find on their own and advertisers buy traffic. Simple, yet so difficult.

We now have to ask ourselves how we prepare for change, who will be the potential winners and who will be the potential losers. It’s not good enough to sit on the fence and watch, you have to participate. The hardest challenge is to get competing forces to recognise what they compete on and to start to collaborate on the rest in order to make a new offer that is different because of the collaboration. One of the best examples in publishing was the Crossref initiative and organisation one of the worst examples is the rights registry giveaway to Google. Collaboration is very difficult for most organisations, with every employee seeming to have ‘we know best’ running through their genes. Harnessing the huge publishing network offers the biggest opportunity, operating individually offers the same opportunity to others.

So what of newsprint in the digital age?

We bet you wouldn't do that with a Kindle or Plastic Logic device!

We have heard as many, if not more, predictions about the death of the newspaper over the years than any over media format. Although its history is long, the tabloid as we know it today is barely a century old. Driven my mass literacy, it rose to give the masses their daily news, gossip, insights, sport and classifieds, but today the world has changed and the newspaper world has to adjust to survive.

Television was the first salvo across its bow. It gave us our daily news which now is on a constant loop and available anywhere, anytime. Moreover it gave us pictures, realism and breaking news in real-time. The Internet has continued to expand on this and now means instant alerts, and access to any story 24 x 7. Also consolidated news from journals such as The Week provided more condensed and digestible reviews than the weighty weekenders.

Mobile technology not only gave us news on the move it changed how users interacted with the news. Suddenly everyone potentially became a journalist or photographer on the spot and who cared if the pictures were grainy – they were real time. Blogs sprung up offering news and views for free. The writing may not have been as creative or clever but like YouTube’s impact on video it was clearly visible.

The Internet opened up the lucrative classified ads , making them more readily searchable and increased their appeal to a wider audience. The free classified operators such as Craigslist in the US, as well as Kijiji and Gumtree internationally extended the appeal. Craigslist.org was one of the first online classified sites, and has grown to become the largest classified source, bringing in over 14 million unique visitors a month. This new shift has cannibalized newsprint classified revenues and now the more mainstream adverts are moving online.

Now we have the news meltdown. The Tribune Company has given a two-year notice to the Associated Press that its daily newspapers plan to drop the news service, becoming the first major newspaper chain to do. The dispute may be over new rates but the move is one that signals further changes in these tempestuous waters.

However, the real change is in the user and how, what and when they want and also how they value it.