How Craig Newmark Destroyed Newspapers
In the fall of 1996, Craig Newmark sat down at his keyboard and, with a few strokes, destroyed the newspaper industry.
In the fall of 1996, Craig Newmark sat down at his keyboard and, with a few strokes, destroyed the newspaper industry.
In the past decade, more than 2,000 newspapers across the United States have gone out of business. The lack of local news presents a terrible threat to democracy.
We should not blame Newmark.
Working out of a small room above a garage in downtown San Francisco, Newmark created a website called Craigslist. It was a community-sharing place where you could advertise things you wanted to sell, like old furniture or a used car, or offer jobs. It was just like the classifieds the newspapers ran, except it was online. The newspapers were still, well, paper.
Newmark had not set out to destroy the newspaper business. His interest was in serving the community. The site had originally been called List Foundation, and it had been initially limited to Newmark and his friends. It listed, among other things, community activities. It was more akin to an online bulletin board. But the idea worked.
Like Facebook, which began on at Harvard and then was limited to select universities, Craigslist went viral — a new concept in the late 90s. In 1999, three years after the site had been launched, Newmark incorporated it as a for-profit business, and in 2000 he was finally able to quit his job as a software engineer and devote his attention fully to Craigslist. The company now had nine employees working out of his apartment.
By 2001, Newmark began expanding Craigslist beyond San Francisco. The model was infinitely scalable. Four more cities were added in that year alone. Soon it would go national and, later, global. For newspapers, advertising revenue is their lifeblood, and the classifieds were the carotid artery of income. An average newspaper page might easily contain hundreds of classified ads, each one paid for by an individual at an astonishing per-inch price. And a paper like The New York Times or the San Francisco Chronicle might carry dozens and dozens of pages of classifieds- real estate ads, cars for sale, jobs offered, and so on. On Sunday, The New York Times had a section of 60 or more pages of nothing but classifieds. And because the ads were so expensive, you paid by the letter. Homes for sale were written in a kind of code: 2BR, DR, EIK, WBF, and so on — Two bedrooms, dining room, eat-in kitchen, wood-burning fireplace.
There was no limit to what you could advertise — anything and everything. With Newmark’s Craigslist, newspaper classifieds came to an end almost overnight. Newspaper revenues were decimated. The 150-year-old newspaper business model was dead, and so were the papers. Now, the funny thing is that Craig Newmark’s little office was only a few blocks from the offices of The San Francisco Chronicle — the biggest newspaper not just in San Francisco but one of the most powerful and richest newspapers in the United States. Founded in 1865, the Chronicle was to San Francisco what the New York Times was to New York. The Chronicle Building was a San Francisco landmark. The people who ran the Chronicle certainly knew what Craig Newmark was doing. With their vast wealth and reputation, and brand, it would have been incredibly simple for them to have built their own online classifieds site and owned the whole idea of online classifieds. But they could not bring themselves to do it. All the evidence was right in front of them, but they simply could not let go of their love of paper. It was too deeply baked into the way they saw the world and themselves. And even if The Chronicle could not bring itself to move its classified online, there were hundreds of other papers that had the resources to do it — none did. Most preferred, in a strange, almost suicidal way, to go out of business first.
Many people think the conventional news business is ripe for disruption. It’s not just the tech — it’s what you do with it.