Paper instructions:
Read Case Study 2.2 entitled “Craigslist: The Ultimate Online Classified Site,” and answer the following questions:
1. What is the Craig’s List business model?
2. What is the business and social value that Craig’s List provides?
3. What are some of the risks of using this web site?
Write an essay that is at least 300 words in length, fully elaborating on each of the three questions.
Case 2.2: EC Application: The Ultimate Online Classified Site
If you want to find (or offer) a job, housing, goods and services, social activities, and much more in more than 500 cities in five languages and in more than 50 countries worldwide, go to Craigslist (craigslist.org). The site has much more information than you will find in all the newspapers in the individual cities. For example, more than 500,000 new jobs are listed from the more than 10 million new classified ads received by Craigslist every month. Each month there are more than 50 million visitors to the site. Craig Newmark, the founder of Craigslist, has said that everything is for sale on the site except the site itself. Although many other sites offer free classifieds, no other site even comes close to Craigslist.
In addition, Craigslist features 100 topical discussion forums with more than 120 million user postings. Every day, people in 450 cities worldwide check classified ads and interact on forums. No wonder that Craigslist has more than 9 billion page views per month, making it the seventh most visited site in the English language. Craigslist is considered by many as one of the few Web sites that could change the world because it is simply a free notice board with more than 4 billion readers (Naughton 2006). For more information, see craigslist.org/about/factsheet.
Users cite the reasons for the popularity of Craigslist:
• It gives people a voice.
• It promotes a sense of trust, even intimacy.
• It is consistent and champions down-to-earth values.
• It illustrates simplicity.
• It has social-networking capabilities.
• It can be used for free in most cases (you can post free ads except for business, for rent, or for sale ads in a few large cities).
• It is effective and well visited. The site serves more than 9 billion page views per month.
As an example of the site’s effectiveness, we provide the personal experience of one of the authors who, needed to rent his condo in Los Angeles. The usual process would take two to four weeks and $400 t $700 in newspaper ads, plus ads in the local online site for rent services, to get condo rented. With Craigslist, it took less than a week at no cost. As more people discover Craigslist, the traditional newspaper-based classified ad rates may become lower, and fewer ads will be printed.
EBay owns 25 percent of Craigslist. Craigslist charges for “help wanted” ads and apartment broker listings in some larger cities. In addition, Craigslist may charge ad placers, especially when an ad has rich media features. Classified advertising is Craigslist’s real money-making opportunity. According to Liedtke (2009), employment advertising is expected to account for $85 million of Craigslist’s revenue this year. Other paid categories include housing ads (nearly $9 million) and adult-only ads (nearly $4 million). Further questions regarding the future of Craigslist have to do with the very hands-off mentality that made this site famous. Specifically, critics charge that users post illegitimate and possibly illegal ads on the site practice. Some users have complained about questionable ads being posted, especially in the “job” section. This would include pyramid schemed and under-the-counter work. Craigslist also attracts criminals seeking to commit fraud by misleading the gullible into accepting false checks. The anonymity of Craigslist’s users and the lack of ratings systems create an environment where deceitful users cannot be held accountable for their actions.
Another concern is that erotic services make up a significant portion of the total traffic on the site. There is a fear that many of the sexual encounters facilitated using Craigslist have been with underage girls. With the sheer volume of users and ads posted per day, such policing is not possible given the modest workforce of only 24 that the site employs.
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