Craigslist's Craig Newmark--no more Mr. Nice Guy?
Founder of Web's top classifieds site is taking fire from numerous critics, and the traditionally benevolent innovator is getting feisty.
During an interview last week, a smiling Newmark offered up a little history lesson in response: "In the 1780s (following America's War of Independence), the British commonly referred to the American experiment as anarchism," the 53-year-old Newmark said. "And look...it's kind of working out."
Craig Newmark
Considered by many to be one of the most benign of Silicon Valley's top innovators, Newmark has shown a feistier side recently. When he's not verbally jousting with knights, the mastermind behind the Web's top classifieds publication can be found beating a drum for Net neutrality or defending his namesake network of sites against claims that it allows people to post discriminatory housing ads.
He's suggested that Cox Communications wrongfully blocked access to his site, and he's fended off criticism from New York real estate brokers who got peeved when Craigslist began charging them $10 to post apartment listings. And then there's the longtime grudge against Craigslist held by many newspapers executives, who claim the network is almost single-handedly killing their industry.
So is this a case of no more Mr. Nice Guy?
"We do what feels right to us," Newmark told a crowd of executives last week at the Supernova 2006 media conference. "That's our idea of a moral compass."
Up to now, Newmark's compass is apparently pointing him in the right direction. Last week, Craigslist expanded into 100 new cities and now operates in 300. Each month, customers view 4 billion pages on the family of sites and employers post more than 500,000 new job listings, said Jim Buckmaster, CEO of the privately held company.
Craigslist allows anyone to post ads for almost anything they want to sell, without charging them a cent. Buyers don't pay either. People find jobs, rooms to rent, pets, furniture and clothes, as well as lovers, on Craigslist. The effect of the network on our society is hard to gauge, but it's difficult to find anyone in the tech sector or in the nation's biggest cities that hasn't unloaded an old couch or found a roommate on the site.
"I love Craig," said Forrester Research media analyst Charlene Li. Typically conservative when discussing companies she covers, Li gushes when talking about Newmark. Before refurbishing her home recently, Li sold most of its contents on Craigslist, right down to the doorknobs. "Everybody has their own Craigslist story" she said.
Few companies have fostered as much customer loyalty. That's largely due to Newmark's almost fanatical attention to customers. He started the list in 1995 as a way to inform friends about special events in San Francisco. From there, the list grew into a company, and Newmark found that he enjoyed working with the public more than overseeing day-to-day operations. Thus, he turned those duties over to someone else and now carries the unusual dual titles of chairman and customer service representative.
He could be at the helm of the company or sit around as its "glamorous figurehead" (as the self-proclaimed nerd has said jokingly), but instead, he spends his days reading e-mails and answering customer complaints--a practice he says even the most high-powered CEO should partake of from time to time.
Another element of the company's popularity among customers is its consistent stance on social responsibility. Sure, plenty of businesses say they care about people and customers, but few forgo profits in order to "give people a break," the Craigslist mantra. The company could be slicing off a tasty share of the billion-dollar classifieds pie for itself. Instead, Craigslist is satisfied with the $25 million it took in last year, according to a story last week in The Wall Street Journal.
But how does Newmark's philosophy on social responsibility jibe with his company's undermining of the revenue that once powered newspapers, historically society's watchdog? Classifieds once made up more than half the profit at many newspapers. That number has steadily declined in recent years.
Martin Sorrell, chief executive of British media and advertising company WPP, warned traditional media companies to beware of destroyers of traditional business models, according to a report published last week in The Financial Times' online edition. Sorrell singled out Craigslist, according to the newspaper, when he asked the Times: "How do you deal with socialistic anarchists?"Craigslist as a killer of newspapers is "more mythology than truth," Newmark said. The site is having an effect, but newspapers have bigger problems, with falling circulation stemming in part from the public's growing distrust of mainstream media, he said. Newspapers themselves, he said, are dropping the ball when it comes to responsibility: "Newspapers fail to speak truth to power," he said. The media outlets Newmark praises are decidedly new school: television's "The Daily Show" and "The Colbert Report" and the satirical Web site The Onion.
Consumer rights fight
Still, nothing fires up Newmark more than a fight over consumer rights.
For example, he resisted charging for apartment listings in New York, Li said, until becoming convinced that it was the best way to discourage unscrupulous real estate brokers there from posting "bait-and-switch" listings or repeatedly adding the same listing to the site so that it would remain among the most current ads. When customers perform a search on Craigslist, the company's policy is to display the most recently posted listings first.
Another hot spot has involved Net neutrality. Telecommunications and cable companies have hinted that they may charge companies that eat up more bandwidth than others. Net neutrality proponents, including Newmark, want every Web site to be treated equally, and don't want big businesses acting as gatekeepers. In the end, it's consumers who may end up paying the price. Craigslist has become a poster child for neutrality proponents after Cox Communications recently blocked access to the site. Cox, owner of cable and newspaper operations, blames an unintentional systems glitch for the problem. The problem is still unfixed after more than 100 days and that's made conspiracy theorists of some in the neutrality camp.
And then there's the accusation that Craigslist violated the Fair Housing Act by letting people post discriminatory rental ads. The company is fighting these accusations and last week got a hand from Google, Amazon.com, AOL and Yahoo. According to the National Law Journal, the companies filed a brief in the U.S. District Court in Chicago, saying that ruling against Craigslist could harm the future of many online service.
Still, such charges must hurt someone like Newmark deeply, Li said.
Newmark doesn't belong to any minority group and readily acknowledges that his family was not among the poorest in his New Jersey hometown. Nonetheless, he says he shares an affinity with marginalized groups after growing up a nerd, complete with pocket protector and glasses held together by electrical tape.
"The nerd people as a nation are my people," Newmark said. "That means I can identify, to one extent or another, with people who are left out or disenfranchised. I've never been disenfranchised all that much. I'm speaking a little bit out of turn, I know. But what that means is I know I need to pay attention to people who are seriously left out."
And this goes hand in hand with Newmark's basic philosophy on life and business.
"If you want to be successful try to do the right thing," he said. "In the short term you can succeed by screwing people, but it doesn't work too well long term."