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Distributing classified information
24 January 2010 By Adrian Weckler
Craig Newmark is not a household name, but he has achieved many things.
He smashed the print media’s monopoly on classified ads, he revolutionised online advertising, he was appointed as a special adviser on technology to Barack Obama and, along the way, he became one of the world’s most important internet entrepreneurs, alongside Google’s Sergei Brin and Larry Page, Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey.
Next month, Newmark intends to come to Ireland, admitting that he is ‘‘fascinated’’ by the country.
‘‘I’m a huge fan of the history there," Newmark told The Sunday Business Post.
‘‘There’s a certain quote of Oscar Wilde’s that motivates quite a lot of my work: ‘If you want to tell people the truth, make them laugh. Otherwise they’ll kill you. "
Indeed, there are many newspaper owners and editors who might like to kill Newmark.
Having established Craigslist.org, the largest classifieds website in the world, Newmark,57, is more responsible for the decline of newspapers’ fortunes than any other person alive.
Thanks to his firm, many people and companies no longer place small ads in newspapers. Instead, from Boston to Bangalore to Dublin, they list them free on Craigslist. What started as a hobby in 1995 is now an international juggernaut, with 20 billion page views and 80 million new classifieds placed each month.
This has left newspapers - traditionally the gateways to small ads - bereft of their bread-and-butter advertising revenue. It also makes Newmark a hero for the advocates of ‘free’ internet media in the battle over ‘old’ printed media.
From the time it was started by Newmark in 1995,Craigslist adopted a new-world approach - its only revenue comes from US jobs listings, for which it charges between $25 and $75 per job advertised. Everything else on the no-frills site is free so, despite its phenomenal global usage, it is believed to make less than $150 million in total annual revenue.
That did not stop the company from being valued at almost $115 million in 2004, when eBay paid $32 million for a 28 per cent stake. (Craigslist is now suing eBay, alleging it used its board representation to obtain classified information to develop its own classified ad sites.) In 2007, at the height of the economic boom, it was suggested that Craigslist could be worth $1 billion, although Newmark avoids discussing financial metrics.
Despite his status as an internet guru, he does not display the usual trappings of corporate success. In a page straight from Warren Buffett’s management playbook, he eschews pomp, describing his job as a ‘‘customer service rep’’ for Craigslist.org.
‘‘No, I am not in management," he said. ‘‘I literally am a rep. I get problems that people, ordinary customers, e-mail in and I take care of them, either myself or passing them on to the right person. Then I report to my boss."
(His ‘boss’ is a man called Clint. ‘‘As in Clint Eastwood," he explained.) Newmark also says he doesn’t have a fixed view on the debate between old and new media. ‘‘To be honest, I don’t know whether news and the media should be free," he said.
‘‘I don’t think anyone has the exact answer. You have to pay journalists and you have to pay fact-checkers and you have to pay editors. The role of a professional editor is to curate news, to assess what is news and what is not news. You have to pay them."
So does he think that newspapers and the print media, which have had to change their revenue models because of sites like Craigslist, are no longer viable?
‘‘The question is becoming meaningless, since papers are becoming news organisations that use other media an awful lot," Newmark said." I read the [New York] Times every day on paper, but increasingly I get references to other news links from friends on Twitter.
So that is a really big change. It’s also starting to happen for music in a big way."
Does he think that Rupert Murdoch’s current strategy of converting his newspapers’ websites from free to paid access will work?
‘‘Probably not," he said. ‘‘The people attracted to the majority of those publications are not necessarily the people with discretionary income.
The Wall Street Journal might be an exception to that. But that move will give a big boost to the readership of its rivals."
Newmark’s favourite newspaper, The New York Times, is to begin charging for online content from next year. Newmark thinks that a hybrid model may emerge. ‘‘I see people experimenting with a range of commercial models," he said. ‘‘These range from trade models to sponsorship."
One of the trends Newmark is betting on is the proliferation of mobile devices and the use of networking technologies, such as Twitter. Newmark himself is a constant presence on Twitter, relaying political and technology links to his thousands of followers.
‘‘I can see that media consumption is increasingly happening via mobile phones. People are increasingly getting references to stories from their friends on sites such as Twitter," he said.
Unsurprisingly, Newmark is a keen advocate of social networks in business. With computer and broadband penetration reaching saturation point in developed economies, he cannot understand why firms do not take better advantage of a largely free, established network.
In Ireland, Facebook has more than one million registered users, while there are believed to be about 100,000 Irish users of Twitter and LinkedIn.
‘‘Social media is increasingly the way to get the word out," Newmark said. ‘‘The biggest obvious advantage is that it is a lot less expensive than other means. You can make contact with a lot of people for very little."
But don’t Twitter and Facebook appeal more to younger business people, rather than those over 45? Isn’t there still a generational issue?
‘‘Possibly, but there is a generational issue with every new technology," said Newmark.
‘‘The more people use the internet, the less of an issue it becomes.
One network that is sometimes very overlooked is texting. Even if you’re not on Twitter, you might well have access to a texting network, which is spreading rapidly."
As an adviser to the US president, Newmark has two central themes: treat rank-and-file staff as equal to managers and put your customer - or the citizen - above everyone else. Small companies inherently understand this better than large corporations, he said.
‘‘Large organisations are normally run in away that people tell their boss what they think their boss wants to hear, and that continues right up the ladder," he said. ‘‘Because of this, the result is that the people making decisions rarely get good-quality information. In small organisations, commentary and decision-making happens much closer to the ground."
But surely this is anathema to the way companies - and government departments - regard an efficient operation?
‘‘Rank-and-file employees generally have much better information about customers than managers do," said Newmark. ‘‘I think we’re beginning to see how, by genuinely empowering your employees, you can really transform your business."
Another of Newmark’s themes is the acceptance of failure in business. He is dismayed by the culture in Ireland and Britain that stigmatises people who fail at a business venture.
‘‘Last year, I was invited to attend a conference in England called Reboot Britain," he said.
‘‘I realised then how deep an issue this is over here. From what I hear, the acceptance of failure is unique to Silicon Valley.
That needs to change. The acceptance of failure means that people will take greater risks and achieve more success."
But isn’t ‘risk’ a dirty word in business now? Isn’t risk what caused the global financial crisis, as banks and hedge funds bet everything on a bubble?
‘‘Risk has a whole family of connotations," said Newmark.
‘‘In the US, a lot of people did make unfortunate investments and took bad risks. But you have to balance that in its right context. In the US, our financial regulators were effectively told not to do their jobs."
Newmark takes a keen interest in US and world politics. He is on the board of The Sunlight Foundation, a non-profit organisation that looks for greater transparency in government departments. One of Newmark’s achievements has been to get the US government to release large chunks of data about housing and transport infrastructure, making it available for public consumption through devices such as iPhone applications.
He is also a staunch critic of the last US Republican administration. He sees parallels between the US establishment and the Roman empire.
‘‘Studying Roman history is a very effective way of learning some history that otherwise would be too painful to contemplate," he said.
‘‘There are a lot of similarities between what went on then and what is going on in my country today."
Craig Newmark will be a keynote speaker at the Dublin Web Summit, in association with DoneDeal.ie, on February 4 at Trinity College, Dublin. He will also attend Trinity College’s Philosophical Society, where he will receive an honorary patronage
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