This from Poynter Online – E-Media Tidbits: the story of how the Bakerfield Californian has responded to Craigslist entering its market by launching its own free classifieds service:
What’s the business model? Product manager Dan Pacheco (whose other life is as president of Colorado-based consultancy FutureForecast) says the plan is to build as large of an audience as possible, then down the road perhaps charge for some ads — though that’s not anticipated for some time. This is the Craigslist model: Craig’s city sites don’t charge for ads, except in a couple major markets where the company has begun charging for employment and some rental ads. Pacheco says other ideas for Bakotopia to make money are being discussed, but nothing’s yet ready to be talked about publicly.
Bakotopia is clearly aimed at the young people of Bakersfield. It is NOT branded with the Californian name. The site’s About page has no reference whatsoever to the newspaper. You’d only figure out the connection if you knew that Bakotopia parent Mercado Nuevo LLC is a wholly owned subsidiary of the Californian.
And, as if to confirm the hyper-power of Craig, this post from Kottke about how the mere presence of Craigslist in a major population centre leads to the creation of new forms of business that don’t have to pay for advertising:
Paul told me that these days, he got most of his jobs from CL and only one or two a week from personal referrals. I found that surprising and when I pressed him further, he told me that because of CL, he’s been able to do pursue moving (which he really likes doing) as a full-time career. I can’t remember the exact quote, but Paul said something to the effect that he can’t believe he’s getting away with starting a full-time business on CL without it costing him a single dime.