A year ago Heather Hopkins, research director at internet monitoring company Hitwise, was moving from Boston to London, but had not left time to sell some possessions using newspaper classifieds or eBay. Instead, she used a local community classified website called craigslist, and soon buyers were at the door to buy her racing bike. She wasn't charged a penny for the service.
The name 'craigslist' has become one of the scariest words in the vocabulary of US publishers, who fear it is destroying the classified-ad model that accounts for 30%-50% of their income. In some cities, 70% of classified revenue has been wiped out, and a few weeks ago there were indications that craigslist may be grabbing people's attention in the UK.
Craigslist.org, whose homepage looks as if it was laid out using a manual typewriter, is like a zombie in a bad B-movie that nobody has quite worked out how to stop. It doesn't charge individuals to advertise, as a paper might, nor does it take a cut of sales in the manner of eBay. Similarly, it does not carry ads, contributing to the anti-establishment feel of a site that appears more community- than profit-minded.
But what the site's laid-back founders do is generate $10m (拢5.5m) a year by charging businesses in San Francisco, Los Angeles and New York to place job ads - enough to cover the costs and wages of the company's 18 staff.
Craig Newmark launched the first craigslist in San Francisco in 1995.
There are now 175 sites across 50 US states and 34 countries. More than 5m classified ads are posted each month, while 10m users generate a whopping 2.5bn page views.
Newspaper reaction
Such is the concern about classified websites that the Newspaper Association of America (NAA) commissioned McKinsey & Company to conduct a study, which caused a stir when unveiled at the NAA's convention in April.
The research found that in markets such as San Francisco, where craigslist has achieved 'significant traction', the number of classified ads indexed to papers' circulation was 60% to 70% lower than non-mature craigslist markets.
A London site opened in April 2003 (http://london.craigslist.org/), but has not yet achieved 'traction' and is relatively small in terms of share of visits. However, according to Hitwise, during the week ending 23 July this year, one out of every 800 search engine requests made in the UK was for craigslist.
Hitwise's Hopkins says this is a dramatic increase for such a small site. 'There has been huge interest in the past month as searches for craigslist have jumped,' she says. In the US, it is the fourth-most visited general interest portal, but has grown solely by word of mouth and practically no marketing.
Craigslist chief executive Jim Buckmaster says he does not know what drove the July surge in the UK, but added that coverage by the BBC may have contributed to a second burst in August.
Each month, more than 10,000 classified ads are placed on Craigslist's UK sites (which include Manchester, Edinburgh, Belfast, Cardiff, Glasgow and Birmingham), generating 150,000 UK unique monthly visitors and 7m page views.
It remains to be seen whether recent interest is maintained. The UK craigslist sites rank 12th among classified shopping sites with a 2.7% share of visits, well behind the sites of Ad Trader and Exchange & Mart.
Craigslist currently trails the home-grown free-classified website Gumtree, which has quietly built a significant following since launch in March 2000. Gumtree now has sites in 30 cities across the UK, and its London website alone generates more than 1.1m visits each month. In March 111,505 ads were posted on London Gumtree.
Much is at stake for the UK publishing industry, with classified ads accounting for 拢123m or 24.7% of ad revenues at national newspapers in the 12 months to March 2005. Classifieds also account for a sizeable chunk of the 拢3.2bn in annual ad revenues for the regional press.
Wary rivals
Tim Bowdler, chief executive of local newspaper and internet publisher Johnston Press, said he is aware of craigslist and although it does not yet compete with any of his company's 270 titles, he is not complacent about the threat. 'We are very aware of the threats - and opportunities - that the internet brings,' he says.
He believes regional papers enjoy an 'incredibly strong advantage', as they have long-standing relationships with local readers and advertisers upon which they can build.
Johnston Press has more than 200 websites, which at any one time carry 200,000 classified car ads, plus property and recruitment classifieds.
For the regional press as a whole, online recruitment advertising expenditure amounted to 拢33m in 2004.
But strong community relationships are not the sole preserve of regional newspapers. Jo Lyall, head of online at mOne London, WPP's digital and direct media company, says one of the strengths of the internet is its power to create virtual communities.
Free-classified sites are also a threat to transactional sites such as eBay; indeed, in the US craigslist's traffic amounts to a fifth of that of eBay. In addition, such sites do not charge a commission on the sale of a product and have an advantage, in that their emphasis is local.
EBay's response has been to develop local offerings and adopt the Microsoft approach of buying the competition. Although it is a sore point, eBay managed to buy a 25% stake from one of craigslist's founders, and in March launched classifieds websites in international markets.
While little-known names such as craigslist and Gumtree may not seem a credible threat to UK publishers, eBay's acquisition of Gumtree in May should be more than enough to cause UK publishers a few sleepless nights.