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The much-loved Web site is taking millions from Bay Area newspapers and causing layoffs that adversely affect coverage. And its founder's well-intentioned support of citizen journalism has a slim chance of fixing the problem.

Wednesday, Nov 30 2005

Page 3 of 7

While the failings of the modern newspaper industry are many, if Craigslist wasn't costing them big bucks, it's unlikely that publishers would have created a host of Craigslist-copycat sites. BackPage, the mostly free classifieds site launched last year by SF Weekly's corporate parent, New Times, is only slightly more commercial than Craigslist, offering additional paid services that place an ad higher in the listings or print it in the paper. While it stopped the bleeding of classifieds from New Times papers, Senior Vice President Scott Spear admits that BackPage has little chance of overtaking Craigslist in its established cities. Nationally, BackPage has 1.8 million visitors per month, less than the number Craigslist attracts in the Bay Area alone.

Even Chronicle Publisher Frank Vega, who plays down Craigslist's damage to his own paper, concedes that as the site grows nationally, its future effects on the media are unknown. "I don't have a crystal ball," Vega says. "Craigslist, a year or two from now, [maybe] we'd look at that as the main drain of dollars from what used to be our business."

In the face of this criticism, Newmark has answers at the ready. As a high schooler, he was a debater, reportedly a very good one, and he makes good use of debating tricks to address the issue. For example, deny the truth of your opponent's statement: "It's an overstatement that we're costing [newspapers] $50 million." Next, blame the problem on something else: "I think newspapers need to return to being community services and not look for high profit margins." When in doubt, play dumb: "My understanding is that a lot of them [value high profits], and that's not the way to do it. I'm speaking ... I'm repeating what I've heard other people say. I'm out of my depth here. I am a dilettante."

Newmark uses words like "dilettante" and "amateur" often. They absolve him of responsibility for any statement he makes. Yet he's spent the past year speaking out on media matters, at lectures and panels sponsored by everyone from Google to the Columbia University Graduate School of Journalism, and he knows people are listening to what he says.

"Among my efforts is exploiting my superpower of creating noise, and hopefully my superpower to stop talking if and when the time comes," Newmark says. "These are my special abilities, and I've sworn to use my abilities only for good and never for personal gain." He stares forward, satisfied. His tone is sarcastic, but some part of him is a pre-pubescent comic book reader who always wanted to say that.

Although Newmark believes Craigslist's effect on the media is exaggerated, he now feels a duty to help save newspapers from themselves. The speeches are part of a larger campaign, rooted in a belief that, besides evading technological and market changes, today's newspapers aren't doing their jobs. Newmark especially faults reporters for being cowed by the Bush administration into banging the drum for war in Iraq.

"It stems from his frustration with these obsequious mouthpieces for whatever the administration wants to get across," Craigslist CEO Jim Buckmaster says. "The last thing either of us feels we need from the elite media folks to the government administration is reinforcement messages and apologist pronouncements. We both feel that that's harmful." It almost sounds like a quote from radical intellectual Noam Chomsky (Buckmaster is a big fan).

Newmark may not share his CEO's politics, but he has similar sentiments about American journalism. He is critical of daily newspapers mainly because he's a news junkie himself. The sounds of National Public Radio waft through Newmark's house from the moment he wakes up until he goes to bed. News is the background music of his life. He's a frequent reader of blogs, books, and, yes, newspapers. "Craig and I both love newspapers," says Buckmaster. "We're both avid readers of newspapers. It's not as though we're out to get the newspapers."

Newmark and Buckmaster believe that Craigslist itself is a public good. "What we're providing has been found, and is being found, to be tremendously useful by millions of people who wouldn't have access to any means of getting the word out about what they're trying to do in their lives," Buckmaster says. "It's whether your sympathies lie with those millions of folks who need something like what we're providing, or whether you want to put your sympathies with the billion-dollar media conglomerates and whether their profit margins decline from 30 percent to 25 percent."

Unfortunately, Buckmaster neglects to mention Craigslist's effect on smaller papers and chains. Embarcadero Publishing Co., which owns Palo Alto Weekly and five other local community papers, lost enough revenues from Craigslist to lead it to establish Fogster, another Craigslist-copycat site. Fogster reversed Palo Alto Weekly's downward advertising trend but couldn't win over all of Craigslist's converts. "There's no way we'll get back all the business," says Embarcadero CEO William Johnson. "For a lot of advertisers, once they've used Craigslist ... it's difficult to pull them back into something else, even if it's equally or more effective." For the most part, Craigslist only affects smaller papers near major metropolitan areas, but every month it opens sites in places like Fresno and Bakersfield.

To Craigslist's executives, the consequences for competitors and other industries aren't important. Their choices are justified, they believe, by what the user community asks for.

"Our sympathies have to lie with our users, who tell us they really value having a service like this," Buckmaster says. "Having a free unlimited site where you can post all your needs and connect with others, hopefully that's a powerful thing to have. Someone's gonna provide it."

But it's not the users who are getting rich off of Craigslist.

About The Author

Ryan Blitstein


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