Craigslist and the destruction of newspapers

Craig Newmark, who grew an email listserve into a classified-advertising titan, has given $20 million to the City University of New York  journalism school, which is being renamed in his honor. This has raised some eyebrows among people who regard Craigslist as a killer of a once-major journalism revenue stream, and a counterpoint from others who point out that the math doesn't work. 

I have a slightly different take.

Craigslist did damage newspapers, but it was less about revenue and more about readership. And on the readership front, the newspapers themselves deserve most of the blame.

Classified advertising in the 1960s and 1970s was a mix of commercial and private-party listings. Reading those listings was both useful and entertaining -- how else were you to discover that you really wanted that bandsaw, canoe or barbecue grill? But classified managers, who were measured and evaluated only on financial performance, drove revenue by jacking up rates to take advantage of commercial need. The most expensive space in a newspaper wasn't that full-page 3A department-store ad, it was those pages of 2x4 help-wanted listings in the Sunday edition.  Private-party ads were a neglected nuisance.

When the Internet changed the economics of publishing, newspaper executives could have made private-party ads free -- but they were too afraid of "leakage" from commercial listings masquerading as private, and failed to understand the unbooked value of the private classifieds. The utility value. The readership value. The value to the consumer.

So the door was open for Craigslist, an ugly, low-tech website, to walk away with a major point of relevancy to the community.