Craig Newmark explains the revenue model at Craigslist.
Newmark: The way we make money at Craigslist is basically, oh, we’ve decided the site should be mostly free. Nothing noble or altruistic about it, we’re just operating out of principles that feel right. Specifically, right now, we charge for job postings in 17 cities and apartment listings in New York, New York only because real estate is a blood sport in New York. The principle is that in ’99, I asked people, hey, how should we pay the bills and do a little better than that? People told us charge advertisers who already paid too much money for less effective ads. People, specifically, told us there are some consensus that we should charge recruiters and employers for job ads and we should charge real estate agents and brokers for real estate listings. To be very clear, we don’t charge people looking for a job, we don’t charge people looking for a place to live. Nothing noble or altruistic about this, we’re just operating out of a sense of what our core values are about. Craigslist has been self supporting from its beginning. When it was just me, basically, I would write code and do things in my spare time. When the tasks become onerous, I would write more codes to expedite those tasks. In the year we ran on a volunteer basis, we experiment with charging for job postings. And so we bootstrap ourselves from the beginning as a real company in ’99.