The Bottom Line - Foundation Bank

Have you ever posted anything on Craig’s List? For those who don’t know, craigslist.com is basically an online version of the classified ads that is specific to whatever part of the country you live in. The site has a huge following. Did you know that more people visit this site than Ebay and Amazon combined? It’s come a long way from its infancy when Craig Newmark began the site in 1995 as a hobby. Now, the site generates somewhere in the neighborhood of 100 million dollars in revenue per year, and the most amazing stat is that they do all this with only 30 employees! They have sites in over 70 countries and allow you to make postings on anything from your vacuum cleaner to dating services. Seems like a success right? But a recent article in Wired Magazine featured craigslist.com as an example of lost opportunity. The article’s chief criticism was that the site had outdated technology making it cumbersome to manage your way around. The Wired article also noted that there was more potential to monetize the traffic on the site. This could increase profit that could benefit its shareholders. Craig Newmark’s response to observations like this: “I have an apartment, a parking space and good water pressure in my shower. What more could I want?” As a matter of fact, if the rules and regulations were not so complicated, the site would be a non-profit organization. But in light of those non-profit hurdles, Mr. Newmark chose the for-profit route, often giving away those profits as well as ownership in the company. This attitude is pervasive within the culture of craigslist.com. This laissez-faire mentality places a high degree of trust in people and believes that money is not the ultimate pursuit of life. Instead, the company believes in creating a simple infrastructure for people to come together and do business. Newmark has often alluded to the site’s purpose as one of public service. This is evident in observing that many of the services of Craig’s list are available free of charge. Source:http://www.wired.com/entertainment/theweb/magazine/17-09/ff_craigslist?currentPage=1

These are not the only criticisms of the popular site. Craig’s List has come under much scrutiny as of late for prostitution services being posted on its site. In addition, since you can sell just about anything on the site, you can imagine the impropriety of some of the products available for purchase on the site. It is also a playground for scammers and spammers looking to swindle sellers. Little oversight means buyer (and seller) beware.

Craigslist.com (the good and the bad) is indeed a phenomenon that no one has been able to duplicate. But it is more than a company. For its founder, it is a platform to expound a view of business he feels worth applying to the way we do government and life – a hands off approach that allows the market to sort things out. In his mind, capitalism seems to work best when it has the least boundaries to hinder it. Likewise, Newmark would say that capitalism works best when the motivation for innovation is driven by service to society, rather than success for self. Do you agree? In a day when we find ourselves moving toward increased government regulation and increased boundaries for business to navigate between, it might be healthy to entertain a debate on how we define a free market in America today. The definition of capitalism is at stake. How free should American business be? Perhaps Craig’s list can be a case study to help bring answers to that question.

The above is strictly informational and does not constitute any sort of recommendation. Please consult your own financial advisor for specific tax, loan, or other investment advice.