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"Adult Services, which was previously titled “Erotic Services,” was expected to generate $36 million in revenue this year for Craigslist, nearly one-third of th

by noarchy 16y ago

"Adult Services, which was previously titled “Erotic Services,” was expected to generate $36 million in revenue this year for Craigslist, nearly one-third of the $122 million the entire company has been projected to pull in." That's a devastating blow, if it really amounted to that much revenue for Craigslist. Given those figures, it's clear that a market exists for these services, so who will get the business now that Criagslist has withdrawn from it?

derefr 16y ago
That paragraph of the article was completely irrelevant: Adult Services was never part of whatever Craigslist considers its "business plan." Craigslist doesn't try, in any way, shape, or form, to optimize for profit in the way a publicly-traded company would. Disregarding the fact that running a single ad on each page would make them ridiculous amounts of money, they're not even charging for ads in any but a few category/location pairs (e.g. real-estate in NYC.)
- noarchy 16y ago
  I don't see how a loss of tens of millions in revenue qualifies as "irrelevant". Even if it wasn't part of their business plan, it is money lost.
  - derefr 16y ago
    Because it's money they weren't planning on making, and could easily replace severalfold through one of several quick, simple changes to their site if they cared to. They weren't re-investing it in the business, using it to grow or hire; it was simply sitting in their coffers or being paid out as bonuses and charity donations. In short, if you consider Craigslist a black box, losing this income source will have no visible effect on the external operations of that black box—it will be as if it hadn't happened.
  - anamax 16y ago
    The relevance to the biz depends on where that revenue was going. Suppose that $100M/year had been going into Craig Newmark's bank account and he had been contributing that money to charity on a regular basis. Reducing that $100M to $30M would be irrelevant as far as Craigslist-the-company is concerned even though it would be a big hit to the charities. Craigslist is believed to be owned by a couple of people plus EBay's 25%, so the above scenario is possible.

by noarchy 16y ago

derefr 16y ago

That paragraph of the article was completely irrelevant: Adult Services was never part of whatever Craigslist considers its "business plan." Craigslist doesn't try, in any way, shape, or form, to optimize for profit in the way a publicly-traded company would. Disregarding the fact that running a single ad on each page would make them ridiculous amounts of money, they're not even charging for ads in any but a few category/location pairs (e.g. real-estate in NYC.)

noarchy 16y ago
I don't see how a loss of tens of millions in revenue qualifies as "irrelevant". Even if it wasn't part of their business plan, it is money lost.
- derefr 16y ago
  Because it's money they weren't planning on making, and could easily replace severalfold through one of several quick, simple changes to their site if they cared to. They weren't re-investing it in the business, using it to grow or hire; it was simply sitting in their coffers or being paid out as bonuses and charity donations. In short, if you consider Craigslist a black box, losing this income source will have no visible effect on the external operations of that black box—it will be as if it hadn't happened.
- anamax 16y ago
  The relevance to the biz depends on where that revenue was going. Suppose that $100M/year had been going into Craig Newmark's bank account and he had been contributing that money to charity on a regular basis. Reducing that $100M to $30M would be irrelevant as far as Craigslist-the-company is concerned even though it would be a big hit to the charities. Craigslist is believed to be owned by a couple of people plus EBay's 25%, so the above scenario is possible.