Creating the World’s Most Popular List: Craigslist is Born

When Newmark's simple email listings reached over 240 subscribers, he could no longer carry on as he was; even his cc field would not accept anymore email addresses. Instead of shutting down, Newmark decided to move his list to a public server for all to access. He wanted to call his new website "SF-Events" but some of his closer friends suggested calling it "Craigslist" to emphasize the personal and down-to-earth nature of the list.

In its first few years, Newmark ran the site as a part-time hobby, continuing his consulting work full-time during the day. He tried to bring on some volunteers, but they did not pan out as Newmark expected. That is when he had an epiphany. "I saw that we needed to get serious and run it as an actual company," says Newmark. After all, until that point, Craigslist consisted solely of one single 128 MB hard drive computer in Newmark's living room.

It was Newmark's decision to hire Jim Buckmaster as CEO that signaled a new era for the young company. "In 1999, Craigslist was running on a PC," recalls Buckmaster. "I took it to a multi-server environment. I took it to a number of other cities."

In addition to expanding the site, Buckmaster worked with Newmark to change the way the site was run. Up until that point, there was no search engine on the site, no discussion boards, and every user-submitted post was reviewed and uploaded manually. Together, the two moved Craigslist towards the direction of self-service. Users could post material directly online, and a new flagging system would be introduced in order to let users moderate and police their own community.
As a consequence of hiring Buckmaster, Newmark says, "I now own less than 50 percent. It was a good investment."

Following those changes, Craigslist started to boom. Despite its sole source of revenue coming in the form of paid employment ads in three cities ($75 per ad in San Francisco, and $25 per ad in New York and Los Angeles), Craigslist was earning over $10 million in revenues by 2004. Then, in 2005, for a price tag of $15 million, eBay purchased a 25% stake in the company from a former shareholder. "Although I never figured that part of Craigslist might be owned by a public company, Meg Whitman and Pierre Omidyar (eBay) showed that they were interested in us for all the right reasons," says Newmark.

Still, despite the tremendous success of Craigslist, the company and its founder remain humble. It has fewer than 20 employees, and Newmark says he plans on keeping it that way. "Our philosophy is that we're basically making enough money to pay the bills, with a little left."

After all, for Newmark, the company serves a higher purpose than profit. Through Craigslist, he says he has met people naïve enough to believe that using the Internet, they could together save the world. "I share that naïveté," he says.