Online classifieds and community site is a cash cow that generated an estimated $55 million last year in revenue and is on track to take in $81 million in revenue this year, according to a report by research and consulting company Classified Intelligence.

"With just a few simple changes — additional charges that might improve functionality and usability of the site — revenue could easily top $100 million in 2008. If it doesn’t reach that lofty number this year, it’s virtually guaranteed to do so in 2009," the report states.

Craigslist, a for-profit San Francisco-based company that operates a global network of market-specific sites, and other online classified sites have cut deeply into ad revenue for print classifieds as advertisers have increasingly flocked to cheap and free online advertising sources.

A 2004 Classified Intelligence report estimated that the popularity of craigslist represented an annual $50 million to $65 million drain to newspapers in the San Francisco Bay Area in job ads alone, while company founder Craig Newmark has said niche sites such as and may be having a bigger impact on print-ad revenue shrinkage.

Newspapers have continued to feel the pinch in ad revenues. Classified ad revenues for U.S. newspapers dropped 17 percent in 2007 compared to 2006, according to statistics released by the Newspaper Association of America, with overall ad revenues dropping $1.4 billion in 2007 to $12.6 billion. The only category of revenue growth was in newspapers’ online revenues, according to the report.

Classified Intelligence studied a week’s worth of craigslist site ad postings in January and March to arrive at its revenue estimates for the company. In 2003, the company publicly projected revenue of $7 million, and Classified Intelligence estimated that revenue grew to $9.3 million in 2004, was between $14 million to $16 million in 2005, and reached $30 million in 2006.

The company charges $25 for job ads in 10 major U.S. metro areas and $75 for job ads in the San Francisco area. Also, craigslist charges $10 for real estate ads placed by agents and brokers in the New York City area.

If craigslist simply started charging for job ads in a few more market areas where it already has operations, company revenue would "easily reach or even top $100 million," according to the Classified Intelligence report.

If the site increased the New York City real estate ads fee to $15, craigslist would gain another $5.5 million in annual revenue, the report states.

Craigslist has reported that its network of sites draws about 9 billion page views a month, 30 million new classified ads each month, 10 million new images uploaded each month, and 2 million new job listings each month. The company has 25 full-time employees who work at the company’s San Francisco headquarters.

Competition is growing for craigslist, the report suggests. EBay-owned, a free online classified site, is "openly and aggressively" targeting craigslist even though eBay holds a 25 percent stake in craigslist, Classified Intelligence reports.

Kijiji’s general manager, the report notes, has criticized craigslist for clinging to its dated design and interface, and remaining an English-only site. Craigslist in December did roll out some Spanish-language sites, and last month launched sites in four other languages. Kijiji offers its site in 14 languages and 21 countries.

Other free online classified sites are gaining steam, such as, owned by Village Voice Media and, sponsored by waste services company Waste Management Inc. operates in 75 markets and reportedly has about 4.8 million members, Classified Intelligence reports.

There are other international competitors in the online classified space, too, including and Both companies were launched as free classified sites but are now paid-ad sites owned by giant media companies, the report states.

The Classified Intelligence report notes that there are some dangers associated with online classified ads — some have used craigslist ads to carry out crimes, including fraud and violent or sexual crimes, and craigslist was the subject of a lawsuit for discriminatory housing ads placed at the site by users. That lawsuit, filed by a Chicago lawyers’ group, was unsuccessful.


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