Experts predict that popular classified site Craigslist will earn $36 million this year from adult services ads, three times the 2009 profit from adult ads. Based out of an unassuming San Francisco storefront, the company’s known for allowing users to find jobs, rent apartments, and write creepy letters to Whole Foods employees; it’s also predicted to bring in $122 million this year, a 22% increase from 2009, reports the New York Times.
In nineteen major American cities, users must pay to post job listings, and New Yorkers must also pay for real estate listings. But adult ads now cost $10 each ($5 for repeat postings) in all 438 of the site’s US markets. And that adds up to big profits.
James Buckmaster, Craigslist CEO, said he would not confirm the numbers because the traditionally secretive company does not discuss its finances publicly. (The revenue estimate was released by industry analysts independent Advanced Interactive Media Group.) Initially, Craigslist committed to donate profits from sex ads to charity but reversed its decision last May, declining from then on to acknowledge where the money goes. The company also decided last May to raise the price for adult services ads from $5 to $10.
The AIM group estimated that the site’s expenses–salaries, servers, bandwidth and legal fees–will cost under $50 million this year, meaning that the company could see a $70 million profit in 2010. Mr. Buckmaster responded to the Times via e-mail:
Of the sex ads, he wrote, “Of the thousands of U.S. venues that carry adult service ads, including venues operated by some of the largest and best known companies in the U.S., Craigslist has done the best and most responsible job of combating child exploitation and human trafficking.”
The company has started two non-profits. The Craigslist Foundation, which received $648,000 in 2008, does not make any donations. But the newer Craigslist Charitable Trust, which was started in 2008 by Mr. Buckmaster and site founder Craig Newmark, is even more of a mystery; Mr. Buckmaster refused to explain the trust’s purpose to the Times.
In 2008, after much criticism, Craigslist eliminated the “erotic services” section and replaced it with the “adult services” category. In order to post ads now, users must have a registered account, which requires e-mail verification and a phone number. (The system is totally faulty, though, because people change phone numbers fairly regularly these days and plenty of people can’t create accounts because previous people with that number–or household members who share a landline–can’t post ads.)
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