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I was wondering how they got that number; basically they use a $690M revenue guess from a third party, apply a valuation multiple from eBay and then multiply by

by wand3r 9y ago

I was wondering how they got that number; basically they use a $690M revenue guess from a third party, apply a valuation multiple from eBay and then multiply by the 42% Newmark owns. Craigslist is unique; it isn't entirely profit driven and as far as Alexa 1000 sites; it might have stayed closest to it's original founding philosophy. I am not sure how they make money; iirc it was only a few select markets and select offerings like realestate. Costs are probably the lowest out of a site that size. Awesome product; seemingly great philosophy; Newmark was early but he was principled and to that Craigslist owes much of it's success

gwern 9y ago
> I was wondering how they got that number; basically they use a $690M revenue guess from a third party, apply a valuation multiple from eBay and then multiply by the 42% Newmark owns. It's not that dubious. The methodology is as simple and straightforward as it gets: > AIM's Zollman, who called his company's Craigslist revenue estimate "conservative," said the AIM Group counts up listings for each category in various markets and then multiplies that by the known fee associated with that listing. (Fees can range from $7 to $75 per posting, depending on location.)...As the founder of 3Taps, Kidd built an interface for programmers that pulled classifieds data from Craigslist and was able get an accurate picture of the total number of listings on the site. He published a 2011 white paper that pegged Craigslist's annual revenue at $300 million, a number he said has certainly risen as Craigslist has increased or rolled out more fees. This is hard to screw up, and if anything, counting listings ought to be a drastic underestimate - crawls of a hostile large high-turnover website will be incomplete, and Craigslist has other potential revenue sources like selling feed data to hedge funds or real estate or HR agencies. This makes it all very puzzling. As the quoted employee says: > "Eventually we realized we were making a lot of money and it was more than we needed to just cover costs," the employee said, noting at one point in the early 2000s Craigslist was making $40,000 a day on Bay Area jobs ads alone. "We could all do the math, and we'd wonder where all the money would go." So CL is making at a bare minimum $300 million a year by 2017, of which a large fraction is profit; the few employees say there are no major capital investments a la Amazon (and no one has ever pointed to major software or hardware investments attributed to Craigslist that I've ever seen), and you never hear of Craigslist billionaires or millionaires aside from Newmark, so the profit isn't simply being spent on datacenters or employee stock compensation; thus, around half would go to Newmark if it's distributed as dividends, so he could have an income of easily >$50m a year over the past 7 years after taxes or >$350m on top of whatever he earned before 2011 on that increasing revenue. The Craigslist Charitable Fund is disbursing $10m/year or less (and donations to that wouldn't be taxed), so that leaves >$300m (7 * 50-10). But Newmark claims to be worth much less than $400m total. So... where does it all go? It's hard to see how two different groups counting listings could be high by an order of magnitude, what Craigslist could be spending it on, or what Newmark is spending it on, unless he's making huge anonymous donations every year through other nonprofits (but why avoid his own CCF?) or simply lying (for privacy to avoid the attention or maintain his self-image, or just in order to make look bad "a fake market intelligence group who I won’t name").
- wand3r 9y ago
  I agree; and didn't say it was dubious. That said; the title was phrased with a slight negative connotation; before it was changed it was like: Newmark was an idealist; now he's a billionaire He is likely a paper billionaire but the article didn't really prove to me he's less of an idealist not that he would sell; making that figure hypothetical. Sure he's rich; but he could be much more so and the reason is ethics and idealism. So too me; I think saying the company is worth x; and he owns most of it fails to consider he likely wouldn't sell and has built a profitable business users love while remaining humble and ignoring greed Edit: I know of one large anonymous donation he has made personally and I an nowhere near connected or know anyone that knows him personally
- fragmede 9y ago
  The article mentions 50 employees; assuming moderate turnover of 10% a year, starting from 1995, plus the 50 current employees, that's 110 people, along some 850,000 in San Francisco. Even if they all wore t-shirts that said they work and Craigslist and are worth millions, would you still even have met one on the street?

by wand3r 9y ago

gwern 9y ago

> I was wondering how they got that number; basically they use a $690M revenue guess from a third party, apply a valuation multiple from eBay and then multiply by the 42% Newmark owns. It's not that dubious. The methodology is as simple and straightforward as it gets: > AIM's Zollman, who called his company's Craigslist revenue estimate "conservative," said the AIM Group counts up listings for each category in various markets and then multiplies that by the known fee associated with that listing. (Fees can range from $7 to $75 per posting, depending on location.)...As the founder of 3Taps, Kidd built an interface for programmers that pulled classifieds data from Craigslist and was able get an accurate picture of the total number of listings on the site. He published a 2011 white paper that pegged Craigslist's annual revenue at $300 million, a number he said has certainly risen as Craigslist has increased or rolled out more fees. This is hard to screw up, and if anything, counting listings ought to be a drastic underestimate - crawls of a hostile large high-turnover website will be incomplete, and Craigslist has other potential revenue sources like selling feed data to hedge funds or real estate or HR agencies. This makes it all very puzzling. As the quoted employee says: > "Eventually we realized we were making a lot of money and it was more than we needed to just cover costs," the employee said, noting at one point in the early 2000s Craigslist was making $40,000 a day on Bay Area jobs ads alone. "We could all do the math, and we'd wonder where all the money would go." So CL is making at a bare minimum $300 million a year by 2017, of which a large fraction is profit; the few employees say there are no major capital investments a la Amazon (and no one has ever pointed to major software or hardware investments attributed to Craigslist that I've ever seen), and you never hear of Craigslist billionaires or millionaires aside from Newmark, so the profit isn't simply being spent on datacenters or employee stock compensation; thus, around half would go to Newmark if it's distributed as dividends, so he could have an income of easily >$50m a year over the past 7 years after taxes or >$350m on top of whatever he earned before 2011 on that increasing revenue. The Craigslist Charitable Fund is disbursing $10m/year or less (and donations to that wouldn't be taxed), so that leaves >$300m (7 * 50-10). But Newmark claims to be worth much less than $400m total. So... where does it all go? It's hard to see how two different groups counting listings could be high by an order of magnitude, what Craigslist could be spending it on, or what Newmark is spending it on, unless he's making huge anonymous donations every year through other nonprofits (but why avoid his own CCF?) or simply lying (for privacy to avoid the attention or maintain his self-image, or just in order to make look bad "a fake market intelligence group who I won’t name").

wand3r 9y ago
I agree; and didn't say it was dubious. That said; the title was phrased with a slight negative connotation; before it was changed it was like: Newmark was an idealist; now he's a billionaire He is likely a paper billionaire but the article didn't really prove to me he's less of an idealist not that he would sell; making that figure hypothetical. Sure he's rich; but he could be much more so and the reason is ethics and idealism. So too me; I think saying the company is worth x; and he owns most of it fails to consider he likely wouldn't sell and has built a profitable business users love while remaining humble and ignoring greed Edit: I know of one large anonymous donation he has made personally and I an nowhere near connected or know anyone that knows him personally
fragmede 9y ago
The article mentions 50 employees; assuming moderate turnover of 10% a year, starting from 1995, plus the 50 current employees, that's 110 people, along some 850,000 in San Francisco. Even if they all wore t-shirts that said they work and Craigslist and are worth millions, would you still even have met one on the street?