Craig Killed the News

Rewind to 1993 in San Francisco, California. Craig Newmark was a Case Western Reserve computer science graduate working at IBM for nearly 17 years and moved on to work at several contract jobs until introduced to the world wide web by a coworker at Charles Schwab. Craig was fascinated with the internet and he was anxious to build something online. Soon, Craig launched a mailing list that morphed into Craigslist.org.

In 1995, Craigslist became a portal to the dot-com scene that connected buyers and sellers; it was the first exponential online marketplace. Soon thereafter, Craigslist became the largest classified advertisements listing in the world.

Printed newspapers at the time were making money from a variety of revenue sources — user subscriptions, single edition sales, advertising, and paid classifieds. These newspapers generated a powerful cash flow that could fund an expensive team of diligent, uncompromised journalists and investigative reporters. Teams of objective Ivy League writers, well worth their money, were an esteemed group that wrote for an audience of millions of readers. The peak of journalistic influence provided readers with fact-checked, timely, objective investigative reporting. News had never been more reliable and accountable.

Soon, Craigslist found a few areas where people were willing to pay and started to charge a nominal twenty-five dollars for job postings, car postings, and real estate postings only. Craigslist embodied the demonetization of classified advertisements.

The result was a significant blow to newspaper classified revenue because Craigslist demonetized classified postings with only 0–10% of what customers would pay in the paper, a 10x improvement. With Craigslist, customers also did not have to wait three to seven days for the Wednesday or Sunday newspaper to publish to get calls about their ad. Rather, they got calls instantly and sold their items up to 10x faster than they would using print classifieds. These are all signs of a disruptive exponential business model.

As newspaper classifieds became obsolete, newspapers began to feel the hurt of the draining budget and soon laid off journalists. This resulted in newspapers buying more and more syndicated content and news stories. Sensationalists and bloggers began to fill their empty spots as…