Many Craigslist users have wondered how the site generates revenue. On the surface, it appears that Craigslist does not charge a fee for anything and that view is almost correct. The site charges fees only for a handful of classified sections, while posting in most sections remain free. Many financial analysts have prompted Craigslist to boost revenues by adding things like banner advertising, but the site has so far resisted any attempt to commercialize itself.

Income Streams Craigslist makes money only through a handful of revenue streams. It charges a $25 fee to post a job listing in six major U.S. cities. It charges $75 for a job listing in the San Francisco area. Last, the company charges a $10 fee to list an apartment rental in New York. The revenues generated from these fees cover only the operating expenses of Craigslist. The company has not made a profit since its inception. This is intentional -- Craigslist president Jim Buckmaster has stated that creating a superior user experience is more important to the company than making money.

Potential Income Streams Craigslist is considering other revenue streams like including banner advertising or Google text ads. However, the company still hesitates to do so because it fears advertisements would take away from the quality of the site. Craigslist president Jim Buckmaster notes that the site deliberated for years about charging fees for job listings; thus, a shift to banner advertising may take time to unfold.

Confusion Over Business Model Some Wall Street analysts like UBS have been confused about Craigslist's business model. Buckmaster has stated that generating a profit is not a central goal for the company. The revenues it takes in from job listings cover operating costs, but the organization has yet to make a profit in its history. The company does not see problem with this however because they focus almost exclusively on maintaining and improving the website. It also does not need more revenue as it has no plans to hire more employees. Craigslist operates with only two dozen workers.

Effect on Newspaper Classified Ads Since Craigslist's inception in the late 1990s, the revenues generated from newspaper classifieds have dropped significantly. A study by the Newspaper Association of America found revenues between 2000 and 2010 dropped from $19.6 billion to $6 billion. That represents a 70 percent decrease, and the trend does not appear to be slowing. Although many factors contributed to this decline, the association believes sites like Craigslist played a large role in cutting into newspaper revenues. This makes sense considering that it costs consumers nothing to post on Craigslist while newspaper ads can be very costly.

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