Courses/Computer Science/CPSC 203/CPSC 203 2007Fall L04/CPSC 203 2007Fall L04 TermProjects/Craigslist: Making Jobs Obsolete

Group Name

We Love Alberta Beef

Group Members

Carolyn McPherson, Tommy Iwanicki, Ty McCulloch

Initial Project Statement

Craigslist page for San Francisco.

We are going to look into the history of Craigslist and how the website operates. Our main purpose is to analyze the Craigslist economy focusing on how it eliminates many jobs from the real world and creates an economy of its own. Finally, we will research the future of Craigslist and how this business can effectively fit into the real world economy.

History of Site

Origins

Craigslist founder Craig Newmark.

Craigslist was founded in 1995 by Craig Newmark, in the San Francisco Bay area. After observing the way people interact on online communities such as Usenet and the WELL, he thought that a similar community with a local focus would be a good idea. He started by creating a mailing list and alerting people about various local events. After it got large enough, it required a server- which came to be known as Craigslist. The popularity of Craigslist spread through word of mouth and people started posting things on the list other than events, such as job listings, apartments for rent, things for sale and even personal ads. As a result of this, Newmark wrote software that would add email postings to a site called craigslist.org. Soon after this, Craig quit his previous job as a software engineer and devoted himself to Craigslist full time. In 1997, Craig was approached by several companies looking to put banner ads on the website, but he declined this in order to maintain a personal feel on the site. Today the site remains banner-ad free.

Expansion

By 2000, Craigslist had grown to having nine full time employees working out of San Francisco, and in June of that year the site expanded to its second city: Boston. By 2001 Craigslist had expanded to 8 other major U.S. cities, and Vancouver became the first Canadian city to have a Craigslist page in April 2001. Today there are 450 Craigslist city pages representing over 50 countries. In 2004 Craigslist began charging for job ads in certain cities in order to raise revenue, and charges $75 per ad in San Francisco, and $25 in 6 other cities. Craigslist says that these fees are below market price. On August 13th of 2004, eBay acquired a 25% stake in the shares of Craigslist, and many of the sites users feared that this would bring more commercialism to the site, however the site has not undergone any major changes as of yet. Speculation on the move is that eBay wanted to increase it's stake in the classified ad business, as well as open the door to a future acquisition of the entire company. In recent years, Craigslist has experienced astounding growth, far outpacing eBay and doing it with a fraction of the employees. The classified ads on Craiglist have hurt many newspapers in the local markets in which it competes, and Newmark says that the key to managing this extensive growth is to maintain customer service. The success of Craigslist is regarded by many in the industry as a cultural phenomenon due to the fact it does not place a great deal of importance on profits and has maintained it's simple interface.

How Craigslist Works

A typical listing on Cragislist.

Craigslist is an electronic database that provides local listings for classified ads such as employment, housing, recreation, and social. It is meant to connect people in a free and easy way and includes a forum where users can have discussions on just about anything. The transactions on Craigslist take place between the poster and the recipient, there is no middle man to complicate the transaction or take part of the profits. Joining Craigslist is easy, all you need to sign up is a valid email address. After you have confirmed your account you can immediately start posting and responding to ads. In order to maintain the site, there is a simple user based system of flagging. There are four flags the users can apply to notify others of significant posts. These flags are:

     - Prohibited - this post is inappropriate and violates Craigslist's terms of use
     - Miscategorized - this post should be moved because it was placed in the wrong section
     - Overpost - this post has occured multiple times              
     - Best of Craigslist - these posts are effective and funny, notifies others to see the post

Craigslist operates with different networks. This allows you to browse and sell products so that people in your same geographic will complete the transaction with you. This method is Craigslist operates with different networks. This allows to to browse and sell products so that people in your same geographic will complete the transaction with you. This method is convenient for both the sellers and buyers because then you do not have to wait a long time or pay large amounts of shipping charges. This site helps to foster a community spirit because the users manage the site and interact with each other. Although the site is not the most visually appealing, it is extremely easy to navigate because of its simple layout and users agree that the site is effective.

Economic Effects

How it cuts out many real world jobs

Craigslist, with its booming economy, has taken away from newspapers’ main source of revenue; ads and classifieds. By providing free advertisements, classifieds, and cheap job postings, it is much more desirable to log onto the internet, and post an available job, immediately, and cost effectively, compared to the costly, and time consuming process used by newspapers. Other jobs, such as travel agents, have been made almost completely obsolete through internet sites, such as Craigslist. Vacations can be posted at cheap prices, and are organized in a manner that is much more convenient for the buyer, and seller. It is much easier to login to your Craigslist account, and deal with many opportunities at once, rather than driving to a travel agent, and deal with one person, you may, or may not, share a common goal with.

How it creates an economy of its own

Craigslist creates a micro-economy, by providing excellent opportunities for both “firms”, and “households”. If a person is looking to sell an item, they can go online; post their product, making it available to the public immediately, cutting out any middleman a pawnshop or businesses such as Cash Converters provide. With competitive pricing, and many options, it leaves the buyers with a plethora of choices, at varying prices, which provides the buyer with a lot of flexibility in their shopping. Through offering opportunities to make money, and save money, Craigslist provides a one stop shop location to purchase merchandise, at a much lower opportunity cost*. Craigslist not only creates an economy for itself by providing financial transactions, trades, and discussion boards, it also provides extremely cheap job postings, for over 400 cities world-wide. It offers a huge range of job opportunities, organized in a manner that makes it extremely easy to find jobs within your category, and learning what your time is worth. By providing “firms” with an excellent resource to sell goods and services, and “households” a place to provide means of production, labour, and capital, Craigslist creates a successful economy of its own, and muscles its way up the website food chain.

How it competes with other websites (ex Ebay) for customer's money

Ebay has a very manufactured look, and works on an extremely well advertised platform; Craigslist first relied entirely on word of mouth. Craigslist has from the beginning had a very “Mom and Pop” look about it, with a very raw, unhampered arrangement, that gets down to business, without any pesky billboards or advertisements flashing in your face. Unlike Ebay, Craigslist is broken down by city, making transactions much easier put through. Another key difference between Ebay and Craigslist is that Craigslist does not require you to register; you only need a valid email address to begin using the website to its full potential. On Craigslist, you can remain anonymous, or be completely open to everyone, while making free posts. With the category breakdown into neighbourhoods, Craigslist provides a much easier way for people to find job postings in their area. People can find an apartment, purchase a cute new pet, donate to a charity, sell their old car, purchase a new car, and pawn off their old comic books from their childhood, and meet the love of their life, while looking for a new job; and that is why Craigslist reigns supreme.

Various things sold on Craigslist.

Scandals on Craigslist

Like many other user based websites, obvious problems can arise from unconsiderate user postings. Although Craigslist has a page for avoiding fradulant transactions and security tips, there have still been cases on the site where a user was scammed by another user. Some examples of this include sending fake cheques that bounce after the product has already been shipped or asking for unneeded bank information and then using it illegally. Craigslist has also had complaints from users who may click on an ad and see inappropriate pictures or text. This has often happened in the dating section, and it now has a warning to prevent youth under the age of 18 from accessing it. In order to stay safe, the user must be aware of what is going on around them. The user should never give out personal information unless they feel the source is secure.

The Future of Craigslist

Craigslist's current manifesto, "keep it simple and don't try to maximize revenue" is going to hold true for the future. Although the website could bring in millions of dollars through the addition of text ads, CEO Jim Buckmaster is adamant about keeping the users happy, and the users do not want to see advertisements. Ebay recently bought 25% of the site, however, it still remains free to users and clear from advertisments.

As for the current design of the website, many computer designers have expressed an interest of updating the look of the website. However, the current website fast, reliable, and easy to use and ultimately that is what the users are looking for, so the design will not be changing anytime soon.

Many critics have suggested that if Craigslist it self is not interested in making a profit, than maybe they could donate potential profits to a charity. Craigslist believes that the users are currently happy using this free website, and they should stay that way. Since all of the users are able to keep their money then they can choose to donate it as they please, but it is not Craislist's position to delegate their users money to charities.

Craigslist is unconcerned with competition. Since they are not looking to make a profit, Craigslist does not mind if other websites operate a similar business.

Craigslist believes in serving their customers and letting the money issues take care of themselves. This is the reason that newspaper classified ads have declined in popularity. Craigslist will do well in the future because of their loyal following and simple business methods. If other companies try to take a similar view to Craigslist, then they too will gain a loyal following. However as long as other companies are focused on profits, chances are that Craigslist and its simpilistic ways are going to continue to increase in popularity.