Popular Craigslist Web Site Now Charges $25 Fee for Help Wanted Listings

By Long, Jessica

While Craigslist claims its new policy of charging local employers to post job openings will discourage abuse of its popular Internet-based social networking and classified advertising service, one critic says the fees would certainly generate more revenues.

“It’s a bit disingenuous to say he’s doing it solely to knock out the scams, because the community already does a good job of notifying you when something isn’t right, and it’s not hard to get them off there once you know,” said Howard Rosen, operations director for the San Diego Reader, which distributes 175,000 copies weekly throughout the county. “But he’s certainly entitled to charge because it is an opportunity for him to make money.”

Craigslist Inc., the San Francisco e-company that offers online ads in various U.S. and foreign cities, began charging employers $25 per help wanted listing last week. San Diego is one of four markets where fees will be charged, the others are Seattle, Boston and Washington, D.C.

The four cities account for more than 20 percent of Craigslist’s traffic, the company says.

The new fee does not apply to non-job-related postings, nor does it charge to browse the ads. Nor does it apply to the site’s “Gigs” category, which lists postings for smaller projects, odd jobs, personal attendants and domestic help.

According to Craigslist spokeswoman Susan MacTavish Best, the fee improves the quality of postings by discouraging abuse of a free service.

“All changes to the Craigslist site come from user requests and that includes when and where we charge for ads,” she said. “As a CL site becomes more and more popular, it makes it time consuming for users to wade through repeat postings and spam-like ads.”

This is not the first time that Craigslist has imposed a fee on specific markets.

Other markets where employers pay a fee to post job ads are San Francisco, Los Angeles and New York City.

The fee in San Francisco is $75 and began eight years ago. A $25 fee in Los Angeles and New York City began two years ago.

Upon initiating those fee structures, Craigslist officials admit that the sheer number of job postings fell significantly in those markets, but insist the overall quality of postings increased.

Leveling The Playing Field

Craigslist was launched in the San Francisco Bay Area in early 1995, and then incorporated as a for-profit business in 1999 when founder Craig Newmark first began offering the service in multiple cities.

Since then, Craigslist has entered more than 300 cities globally, from Bangkok, Thailand, to Calgary, Alberta, Canada.

Despite its bare-bones design, the site, Craigslist.com and Cragislist.org, gets more than four billion page views per month with just 22 employees.

It’s rated as one of the 10 most popular English-speaking sites on the Internet.

In 2004, online auction giant eBay purchased a 25 percent stake in the company. The company, which employs about 20 people, does not disclose financial information.

Varinda Missett, director of advertising for the North County Times, a 90,000 circulation daily newspaper based in Escondido, said she welcomes competition from Craigslist.

However, she believes the service has been too lax in its screening process for years. Because of that, Missett believes the decision to charge San Diego job posters is a positive development.

“Craigslist has had a huge impact, as everybody knows,” Missett said. “But we’ve always hated the fact that they don’t have to follow any guidelines.”

Missett is not the only one to chastise Craigslist for allowing unregulated postings.

The service has come under fire for allowing people to post ads that openly discriminate and allegedly facilitate illegal activities, such as prostitution.

To Charge Or Not

In order to compete with Craigslist, the San Diego UnionTribune, a 300,000-plus circulation daily, decided last fall to offer free classified ads to individuals both online and in print.

The Virginia-based Newspaper Association of America reports that newspapers nationwide took in a total of $17.3 billion on classified ads last year. About $5.1 billion of that was from employment ads.

Although 2005 classified spending in newspapers increased slightly from 2004, it’s still down from its peak of $ 19.6 billion in 2000, the nonprofit association reported.

At the North County Times, classified ads have been revamped in recent years in response to the growing popularity of Craigslist among users.

Although the paper still charges fees to post, special promotions allow customers to place classifieds online at nctimes.com and in the NCT’s print editions.

Advertising director Missett said the paper also recently began offering customers the choice of posting a photo with their classified message in the print edition.

Taking The Offensive

Unlike the dailies, the Reader has taken an entirely different approach, opting to combat fire with fire. The Reader is one of 59 publications to contract with Phoenixbased Backpage.com, which was founded in 2004 by Village Voice Media, a group of alternative newspapers.

A link from the Reader’s Web site drives traffic to the Backpage.com site.

Like Craigslist, users pay nothing to view classified ads, but unlike Craigslist, users can also find coupons for everything from oil changes to restaurant meals. Businesses pay nothing to post coupons, unless they wish to include an image, in which case a small fee is charged.

“When we did Backpage, we realized we’d be competing with ourselves, too, but something had to be done to keep up,” Rosen said. “Everyone’s print ads are down no matter what they tell you, they’re down.”

Copyright San Diego Business Journal Oct 30, 2006