Confusing the Capitalists

This is probably my favorite story of the last week: Craigslist CEO Jim Buckmaster went to a media conference for financial types and made them all drop their jaws to the ground when he explained how Craigslist isn’t all that interested in finding ways to eke profits out of each of its users, it just wants to help them find jobs and dates and apartments:

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

Why doesn’t Craiglist at least do AdSense ads? they asked Buckmaster. His response was that as far as he knew, his users weren’t asking for them. Apparently this precipitated another wave of the “qua?” face from the analysts, et al. They didn’t seem to get the idea that a company could leave that much money on the table.

This makes me feel almost intolerably warm and fuzzy toward Craiglist. I like money quite a bit myself, as most of you know, but I think from time to time it’s perfectly fine not to have money be the main reason one does a thing. Craigslist was not initially designed to make tons and tons of money for Craig Newmark, as I understand it. He wanted to help people find things around San Francisco. The company’s bigger now but its goal is pretty much the same, and I think its fine that the company has focused on that rather than blinging out the revenues. Presumably it’s doing well enough. Unless Newmark and Buckmaster suddenly decide that what they both really need is a 300-foot yacht stocked with cocaine and supermodels, how much more do they need?

Buckmaster’s response to the analysts resonates with me because on a drastically smaller level, these are the same issues I deal with here. I get approached all the time to run ads; I just yesterday turned away someone who asked to run one. I also know people who don’t quite get why I don’t run ads here, given the site’s traffic. The reasons are pretty simple: One, I don’t wanna. Two, I don’t wanna. Three, I don’t wanna. Also, like Buckmaster, I’m not really hearing a clamor for ads from the visitors to the site. I can’t really remember anyone ever saying to me something along the lines of “I like the Whatever, but I’d like it even more with advertising.” Also also, there’s the small matter that unlike Craigslist, this isn’t even a business, so I wouldn’t even have that excuse.

As I’ve noted before, I’m not opposed to people putting ads on their site, and even if I was, my opinion of what other people do one their own site counts as much as their opinion counts for what I do on mine, i.e., not a damn bit. I’m not even saying I will never put ads on the Whatever one day; really, who knows. But right now it doesn’t seem particularly likely. I like not having ads here. I like not having to do everything with an eye on how much it can get me.

On the other hand, I’m not walking away from potentially tens of millions in revenues like the Craigslist people are. All things considered, their decision to skip the ads is rather more impressive than mine. Makes me want to post an ad there or something. You know, just to say “good on you.” Which reminds me I still have my Virginia home up for rent. Hmmm.

49 Comments on “Confusing the Capitalists”

  1. Is it possible… just possible… that not all humans are greedy self-absorbed bastards?

    This could put a kink in my world domination plans.

  2. “His response was that as far as he knew, his users were asking for them.”


    “Also, like Buckmaster, I’m not really hearing a clamor for ads from the visitors to the site.”

    So should that be “were not” in the first quote?

  3. This is all O.K. as long as Craigslist (and the Whatever)stay as private entities. It’s your investment and your money, you really should be able to say what you want to do with it.

    The equation changes if they start asking me for money in order to invest in your company. At that point you owe me an obligation to actually maximize their long-term profits to the best of their abilities. I (nor most shareholders) would actually give money in order to subsidize customers with no prospect of getting some kind of decent return in the future.


  4. Commies!

    Well, that makes sure I don’t go out this year with having the vision of one of our more ubiquitous businesses in my village, one that everybody uses and has delivered to their homes and measured in cubed units, regulated by village ordinance, say in an open meeting that 10% profit just wasn’t enough for them.

    Yes, Virginia, there are George Baileys in the world. It’s not all Mr. Potters.

  5. I’ve seen the Craigslist headquarters isnt it on a shack from the guys home. It’s not in an office building. I mean how much overhead does it cost him except for the actual 5 employees that he has. If I was him I’d sell out like those guys from U Tube did sell the company and make a cool billion after taxes. But that’s just me I like being a greedy, gass guzzling, American Capitalist.

  6. Andrew:

    “The equation changes if they start asking me for money in order to invest in your company. At that point you owe me an obligation to actually maximize their long-term profits to the best of their abilities.”

    Generally yes, although if a company notes at the outset of a public offering that maximizing long-term profits is not a major goal, then, of course, caveat emptor. I remember Google’s IPO precis noted that the company had unconventional goals and wouldn’t be sticking to the usual script in terms of profits, etc. And I remember thinking, well, fair warning.

  7. Whatever doesn’t need ads because it is an ad. I read the blog, I want to buy your books. See, it’s working.

    There is probably some equation you learn in business school that defines how much selling-to a person will allow for how much content recieved. 8 minutes of commercials and 22 minutes of sit com, something like that.

    If you put in more ads, you’ll have to up the content. Which means putting the cats into more funny poses, which means a higher band-aid allowance, and the next thing you know your daughter’s got herself a union card and the ad revenue isn’t looking so good.

    Besides, I like the wet berry bushes. They calm me.

  8. Doesn’t eBay now have a controlling interest in Craigslist?

    I admire the spirit of community at Craigslist but it will be interesting to see how long it can persist in the face of corporate ownership.

    Kudos to Jim Buckmaster.

    As to putting ads on Whatever:Oh yes John. Please bring us ads! I especially like those pop-ups that tell me I won an iPod or something.We NEED more of those.


  9. Mary:

    Re: Will Bunch: Oddly enough, newspapers are generally still making money. Also, newspapers have been bitching about how hard the market is ever since I worked in them, which was 15 years ago now. Will Bunch is continuing that theme.

  10. Scalzi said: ‘I can’t really remember anyone ever saying to me something along the lines of “I like the Whatever, but I’d like it even more with advertising.”‘

    Well, sure—nobody likes adds. However, I bet a lot of us are in the “I like the Whatever, and I’d continue to like it even with some advertising” camp. Especially if it made the difference whether you were able to continue devoting the time to it as you do.

  11. Well, and that’s why I leave open the possibility that I might do that if I needed to. At the moment, I don’t need to, so I don’t.

  12. The thing about print media (newspapers and magazines) is that they no longer get their money from subscriptions now they make their money from advertisement sold onto their papers. And this has been going on since before the internet really made a difference. Anyone ever read the NY Times lately its about 20 pages of news and 100 pages of cheap Bloomindale’s crap that I could care less to buy. What’s hurting them is not Craigslist its crappy reporting and shaddy journalists that turn people off from reading their papers.

  13. I think you fill the niche ads would fill pretty well– as Athena said while watching TV, it’s to find out what one wants. Your ads are personal recommendations and links, telling us what you think is cool right now, and we pick up on that and go forth with the buying. The only reason I can see someone wanting ads is to find more of the same– what ads will Scalzi approve? A Scalzi-approved ad is something like a Scalzi-approved product. Except you already do that.

  14. Oooooh, sarcasm.

    Ads, please add ads, especially the kind that flash and ask you to catch the monkey’s tail and win an iPod, or the kind that float and can’t be scrolled away.

  15. CJ-in-Weld:

    Is “shaddy” a clever combination of “shoddy” and “shady”? I like it!

    It might be, I am nothing without spell check.

  16. I lived in San Frncisco when Craigslist first started. Craigslist was orginally, when Craig Newmark first started it about ten years ago, just a bi-weekly listserv email digest of a lot of random and assorted apartment ads (which were awesome) and for-sale and a few jobs ads. I one got a Macintosh for $300 and a case of beer off the original Craigslist.

    When I was getting ready to move to New York in 1999, I remember talking to Craig and his telling me thought he would like to try expanding his idea to New York. (I think the website had just gone live then). Ha ha!

    It was THE place to find an apartment in San Francisco, tho, and you had to know somebody to get ON Craigslist. It was totally a word-of-mouth thing.

    My, how our baby has grown. :-)

  17. Craigslist is not *that* altruistic. I work in a real estate agency, and the agents used to make extensive use of Craigslist to advertise apartments, but now it charges non-owners $10/ad/day. They still use it, but not in the same way.

    (I will say I think they made this change to reduce the number of professional ads, not just to get more money. Otherwise agents were posting multiple times a day. And it may be only for huge markets such as this one in Brooklyn.)

  18. The reason why they started charging was because agents were doing the bait and switch thing and people were complaining.

  19. I’m even saying I will never put ads on the Whatever one day;

    Err, did you drop a “not” over there (Two dropped “not” in one post? Woke up with a positive mood today?) near the beginning?
    I know some people who may use such phrasing to say just what it currently does, but none of them are, well, writers.

    Well, and that’s why I leave open the possibility that I might do that if I needed to.

    Ah. So it’s the missing “not” then, and you actually can form coherent sentences. That’s a relief.

    Altruism is overrated anyway. Enlightened self-interest is much more trustworthy.

    Altruism is often (possibly always but that’s much harder to prove) self-interest driven. Enlightened or otherwise. So everyone should just be happy together, on either side.

  20. Yaron says: “Altruism is often (possibly always but that’s much harder to prove) self-interest driven. Enlightened or otherwise. So everyone should just be happy together, on either side.”

    I’m just sayin’. To the extent altruism is not grounded in self-interest, it can stop at any time, and nobody has a right to act surprised. If you trace the self-interest, though, you have a better sense if it’s likely to be something you can bank on. That’s what I mean by “more trustworthy.”

  21. It seems to me that Messrs Buckmaster and Newmark (and Mr Scalzi) are exercising the rights of proprietors down the ages who are not beholden to anyone but themselves, which is to do whatever floats their boats.

    More power to their elbows. One size does not fit all.

    The problem isn’t seemingly eccentric proprietors doing their own thing; it is hired managers behaving as though they were proprietors.

    But that’s an argument for another time.

    No ads in Whatever? I hadn’t noticed. Probably because I’m too busy reading what everyone here has written. Which is why we come here, isn’t it?

  22. If the guys at Craigslist (and John) are doing what they want to do with little or no regard for anything who thinks they know better, whose business is it but their own?

    Its your toy, John. It ain’t broke. It doesn’t need fixing.

  23. Wow, I just flashed onto Dick’s “Do Androids Dream of Electric Sheep” and the guy who makes animatronics from the waste in his apartment complex. Damn, what’s that guys name?

  24. Unfortunately, the only real story here is “CEO hasn’t learned CEO-speak.” If Buckmaster had tossed around phrases like “focusing on core competency” and “not diluting the brand,” all the analysts would have been happy and the reporter unsurprised.

  25. If I may analogize to a personal hobby-horse…

    Credit unions operate under more restrictive regulations than banks. To my understanding, this is solely due to laws passed under the justification that “credit unions are at a competitive advantage to banks, because they don’t seek to make a profit.”

    I continue to find this argument morally repugnant. Profit is a choice, not a moral imperative. Or to put it differently, if your for-profit business can’t offer something more attractive than a non-profit alternative… then why does it exist?

  26. Craig came here to give a talk to one of our classes (Gradauate School of Journalism, UC Berkeley) last year, and said he started out by emailing lists of local events to his friends. So maybe the moral of that story is, Watch out! Those inocuous little email lists can grow up to be monsters! (But, I’m glad to see, not necessarily money-grubbing monsters.)

  27. Well, why not run Google AdSense ads, and shunt all of the money off to (for example) Child’s Play?

    For that matter, why doesn’t Craigslist? Why not funnel all that free money towards some good causes?

    In both cases, a small “this is where the revenue from these ads is going, so don’t get huffy:” -sort-of-disclaimer seems like it would nullify any ill-will.

    Or am I just being ignorant?

  28. Rayme, I think the best answer is to see Scalzi’s points 1, 2, and 3.

    MamaDeb, making realtors pay to list their ads doesn’t sound like a lack of altruism to me. Craigslist’s goal (arguably altruistic) is to help people find stuff, not to help businesses make money.

  29. Again the only reason why they made the realtors pay was because the realtors were abusing the website. Placing adds for an apartment listing that seemed too good to be true, and when a prospective tenant would call the realtor would say that is no longer available but instead they have this $2500 a month 300 sq ft studio availalbe. And like a good company they listened to their customers and started charging the scub realtors.

    I live in NYC so naturally i hate Brokers and realtors since they are partly to blame for why rents here are nuts.

  30. I’m a journalist, and I’m not impressed by Will Bunch at Attywood’s arguments.

    Yes, journalism is threatened by the Internet. It’s not just the classifieds — it’s the tens of millions of bloggers who are willing to do what I do — but do it for free.

    This has been going on for more than a decade, and yet somehow I’ve managed to keep my job.

    Bunch finishes his column with a swipe at DailyKos, whom Bunch said is anti-capitalist. But Bunch is being a hypocrite here — he is being anti-capitalist here, by insisting that the marketplace somehow owes him a living.

  31. As Matt noted above, The Whatever is an ad. It’s an ad for John Scalzi. Why would you want to confuse the issue? (Well, sometimes it’s an ad for Charlie Stross, or Subterranean Magazine, or others, but what goes around comes around, right?) But it’s the best kind of ad: the kind that doesn’t stand up and say, “hey! I’m an ad.”

  32. I just finished “The Android’s Dream”. I liked it, and I might not have read it if I hadn’t found this blog.

    I thought Whatever was running an ad for cherries, but it’s hard to tell from the picture. Perhaps it’s actually some sort of weird subliminal, but I have no idea what it *really* means.

  33. Funnily enough, I’ve been through the exact same experience that the Craigslist guys faced in my own life.

    Back in the days when I earned my pence doing the hootchie-mama thing onstage in sequins and heels, one club owner I worked for was forever going on about trying to get me to tan (he had delusions of Miami Beach in southern North Carolina, or something – yanno, the George Hamilton tan, the bulbous blonde on each arm, the expensive but oh-so-tasteful luxury car, the house on the golf course, etc). However, I refused to go tanning for the simple reasons that A) I didn’t feel like paying for skin cancer treatments for the rest of my life and B) I’m terminally Caucasian anyway, so at best I can manage only a pathetic ecru shading around the more exposed bits of my translucent whiteness and mostly I just burn and peel back to my natural whitening-toothpasty vibrancy.

    So one day, this budding Larry Flynt aprentice decides to whip out the ultimate bribe. “You know,” he says, “the girls who tan make a LOT more money.”

    Now, at this point in my career I had few bills (hubs worked our rent off doing handyman work for the landlord, our car was paid for and we had no kids) and even fewer other expenses. In short, I was making far more than I was spending at the time. So, in all innocence I told him that.

    “Jerry,” says I, “I can’t spend the money I’m making now. Why would I want to do all that just to make more?”

    I swear to God I saw something just snap behind his eyes, like the fuse on a wet GFCI socket. He just stared at me for a few minutes with a look that made me seriously concerned for his cardiovascular health, then abruptly turned and left. He rarely spoke to me after that, and then only if absolutely necessary. It’s like I suddenly fell off the map of reality. Which, for him, I’m sure is exactly what happened.

    To this day, I regard it as simultaneously one of the weirdest and one of the funniest things that have ever happened to me. I imagine you’d get much the same response by presenting the Pope with empirical and irrefutable evidence that God didn’t, in fact, exist. Poor guy.

  34. Soni, I loved your story – so funny.

    What people sometimes don’t seem to get is that, as Soni’s story, there are often hidden costs to making more money. Sometimes a person or company has weighed the costs vs the gains and decided that it’s just not worth it. Sure, Craigslist could accept ads and give the money to charity but I bet that accepting even altruistic ads would piss off a lot of users plus it would probably be more work for the Craigslist employees. Ads and sponsors generally don’t just happen and if you don’t need the money why put yourself through the hassle of dealing with people you don’t need to?

  35. Jonathan

    “You know what Richard Pryor used to say – Cocaine is god’s way of saying you’re making too much money.”

    That’s funny!

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