Craigslist, the free community Web site that generates more than 1 billion page-views each month, has cost newspapers in the San Francisco Bay area $50 million to $65 million in employment advertising revenue, a new report shows. Craigslist, which is one-quarter owned by EBay Inc., also has cost the newspapers untold millions more in merchandise and real estate advertising, and has damaged other traditional classified advertising businesses, the report shows.

The 57-page report, “Competing with Craig: Strategies and tactics for battling Craigslist and its counterparts,” was published by Classified Intelligence LLC, a consulting group. The report is designed to help all classified advertising publishers – newspapers, dot-coms, broadcasters and yellow pages – develop more effective products for auto, employment, real estate and merchandise advertising. Craigslist has created an extremely important and valuable marketplace, and perfectly illustrates the changing nature of the classified advertising industry,” said Peter M. Zollman, founding principal of Classified Intelligence. “All classified advertising companies should learn from Craigslist and its founder, Craig Newmark, about effectively serving their audiences.”

The report includes a 15-page section outlining strategies necessary to maintain a classified advertising marketplace – written by a former VP of interactive media for the leading newspaper in San Francisco, and by a committed 23-year-old user of Craigslist who tells newspaper publishers, “Stop thinking like a newspaper,” and explains how they can reach his generation.

Classified advertising represents a $28 billion to $30 billion business in the United States, including $16 billion in daily newspapers, and an estimated $100 billion business internationally.

“Craigslist has created a highly focused, useful tool for its audience, and too many other classified publishers have not,” Zollman said. “Yellow-page publishers are moving into classifieds; dot-com classifieds are growing, and many broadcasters are improving their classified offerings. As the business becomes even more competitive than it has been, consumers will benefit from more efficient marketplaces and advertisers will find improved services. Only publishers who don’t keep up with the changes will lose.”

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