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Saturday, October 3, 2009
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Craigslist, Ebay, Kijiji, Oodle
Craig Newmark, Craigslist, Ebay, Kijiji, Oodle
Craigslist Valuation: $80 Million in 2008 Revenue, Worth $5 Billion
Henry Blodget|Apr. 3, 2008, 8:00 AM | 3,330 |comment92
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Tags: Craigslist, SAI 25
craignewmark.jpgAs we prepare to release our SAI 25: World's Most Valuable Startups list, we're running through some final valuation numbers. One company that is a shoo-in for the list is Craigslist (yes, it has been around a while, but we're defining "start-up" as private companies founded in recent memory that has yet to go public or sell out).
We've struggled to get formal business metrics for Craigslist, but ClickZ has summarized a recent report from Classified Intelligence that should help. CI estimates Craiglist's numbers, but it has at least gone through the laborious process of counting listings, pageviews, etc.
So here are some metrics:
2007 Est. Revenue: $55 million
2008 Est Revenue: $81 million
Monthly Pageviews: 9 billion
Monthly Job Listings: 2 million
Monthly Ad Listings: 30 million
Employees
: 25
Estimated Costs
Let's assume that each of Craigslist's 25 employees costs about $125,000 a year, all in. That's probably high--Craigslist is run like a non-profit--but it should be in the ballpark. This adds up to about $3 million of salary and other HR costs. Let's assume that Craigslist will grow this year, and let's assume that it spends another few million on prosaic costs like rent, insurance, travel, etc. Total estimated 2008 operating expenses: $7.5 million.
On the "cost of sales" line, let's assume that Craiglist spends a boatload on servers and bandwidth to keep the site running smoothly. Craigslist's content is not at all bandwidth intensive--all light text, no computation or transactive processing like eBay or Google--so this should keep its costs well below those of other huge global sites. Let's call it $50 million a year. (This is probably high--grateful for any help in refining).
Add all that together and use the CI revenue estimate, and you have a business with about $80 million in revenue and, say, $25 million in operating profit
. Apply a 10X revenue multiple and/or 25X operating income multiple, and you would have a company worth about $750 million. But obviously Craigslist is worth a heck of a lot more than that.
Craigslist's Real Value
Why is Craigslist worth more than meets the eye? Because it's run like a non-profit. Craig Newmark and co. don't give a damn about generating revenue or profit, and more power to them. But if Craig ever want to sell Craigslist, he'd probably want to get something closer to true value for it--which means we need to think about the company's real earning power.
Let's assume that, instead of charging for job ads in only 11 cities, Craigslist charged for all job ads (currently 2 million a month). Let's assume that it also charged for another 5 million of the 30 million ads on the site each month. Let's assume that Craigslist users were so horrified by the outrage of being charged even a de minimus listing fee that two thirds of these listers stormed off in a huff so that the 7 million of paid listings dropped to, say, 2.5 million a month. And let's assume that Craigslist charged its standard $25 job listing fee for all of them.
What would that generate in revenue? $62.5 million per month, or $750 million a year.
Let's further assume that this outrageous affront to a minority of users--$25 per listing!--would require huge customer service and processing costs, so that Craigslist's overall cost base jumped to $250 million a year. Then we'd have a business with $750 million in revenue and $500 million of operating profit.
Let's put very conservative revenue and operating profit multiples on that--say 7X revenue and 10X operating profit--and we're conservatively looking at a business worth $5 billion.
Thoughts? Speak now or forever hold your peace.
Craigslist Valuation: $80 Million in 2008 Revenue, Worth $5 Billion
Henry Blodget|Apr. 3, 2008, 8:00 AM | 3,330 |comment92
Tags: Craigslist, SAI 25
craignewmark.jpgAs we prepare to release our SAI 25: World's Most Valuable Startups list, we're running through some final valuation numbers. One company that is a shoo-in for the list is Craigslist (yes, it has been around a while, but we're defining "start-up" as private companies founded in recent memory that has yet to go public or sell out).
We've struggled to get formal business metrics for Craigslist, but ClickZ has summarized a recent report from Classified Intelligence that should help. CI estimates Craiglist's numbers, but it has at least gone through the laborious process of counting listings, pageviews, etc.
So here are some metrics:
2007 Est. Revenue: $55 million
2008 Est Revenue: $81 million
Monthly Pageviews: 9 billion
Monthly Job Listings: 2 million
Monthly Ad Listings: 30 million
Employees
: 25
Estimated Costs
Let's assume that each of Craigslist's 25 employees costs about $125,000 a year, all in. That's probably high--Craigslist is run like a non-profit--but it should be in the ballpark. This adds up to about $3 million of salary and other HR costs. Let's assume that Craigslist will grow this year, and let's assume that it spends another few million on prosaic costs like rent, insurance, travel, etc. Total estimated 2008 operating expenses: $7.5 million.
On the "cost of sales" line, let's assume that Craiglist spends a boatload on servers and bandwidth to keep the site running smoothly. Craigslist's content is not at all bandwidth intensive--all light text, no computation or transactive processing like eBay or Google--so this should keep its costs well below those of other huge global sites. Let's call it $50 million a year. (This is probably high--grateful for any help in refining).
Add all that together and use the CI revenue estimate, and you have a business with about $80 million in revenue and, say, $25 million in operating profit
. Apply a 10X revenue multiple and/or 25X operating income multiple, and you would have a company worth about $750 million. But obviously Craigslist is worth a heck of a lot more than that.
Craigslist's Real Value
Why is Craigslist worth more than meets the eye? Because it's run like a non-profit. Craig Newmark and co. don't give a damn about generating revenue or profit, and more power to them. But if Craig ever want to sell Craigslist, he'd probably want to get something closer to true value for it--which means we need to think about the company's real earning power.
Let's assume that, instead of charging for job ads in only 11 cities, Craigslist charged for all job ads (currently 2 million a month). Let's assume that it also charged for another 5 million of the 30 million ads on the site each month. Let's assume that Craigslist users were so horrified by the outrage of being charged even a de minimus listing fee that two thirds of these listers stormed off in a huff so that the 7 million of paid listings dropped to, say, 2.5 million a month. And let's assume that Craigslist charged its standard $25 job listing fee for all of them.
What would that generate in revenue? $62.5 million per month, or $750 million a year.
Let's further assume that this outrageous affront to a minority of users--$25 per listing!--would require huge customer service and processing costs, so that Craigslist's overall cost base jumped to $250 million a year. Then we'd have a business with $750 million in revenue and $500 million of operating profit.
Let's put very conservative revenue and operating profit multiples on that--say 7X revenue and 10X operating profit--and we're conservatively looking at a business worth $5 billion.
Thoughts? Speak now or forever hold your peace.
craig still shrugging off competition
craig still shrugging off competition
Wed, Sep 3, 2008
Featured
The best online sites all have one characteristic in common that keeps the competition at bay: simplicity.
Google’s got a clean, no-frills text box that conceals the complexity of behind-the-scenes magic. Amazon keeps their users coming back with reviews, recommendations, and a giant inventory. And online classifieds site craigslist still boasts the most simple user experience of all minus the colorful ads, flashy video, and garish banners.
With an estimated revenue of $80 million in 2008 and a valuation of about $5 billion, craigslist has continued to keep venture capitalists salivating. Simply put, when it comes to traffic, they’re spanking the would-be craigslist killers, including eBay-owned Kijiji, Vast.com, and Oodle.com.
And it’s hard not to wince when remembering Microsoft’s oft-maligned Windows Live Expo, which shut down in July after a little more than two years of operation.
Lately it seems the competition is understanding that snatching away the die-hard craigslist loyalists is more laborious than finding a younger, more unfaithful audience on Facebook and myspace. Both eBay and Facebook itself have launched marketplace applications, and Oodle is powering myspace’s classified site.
But it appears that recently there have been a few cracks in craigslist’s walled fortress. Ebay, who owned a 28 percent stake in craigslist, was served with a lawsuit by founder Craig Newmark after launching their own version of online classifieds, Kijiji.com. Craigslist wants to force eBay to dilute its shares to less than 25 percent, but eBay isn’t budging. In fact, according to a CNET article, eBay’s CEO said he would happily buy out the remaining portion of craigslist shares to claim full ownership.
Considering craigslist’s aversion to change and their refusal to allow other sites to spider their content, I wasn’t surprised to hear Craig Newmark’s response to my question on if a marketplace application is in craiglist’s future.
“I wish I had more to say,” he said. “We just haven’t really considered it.”
So the point is, for the time being at least, if it ain’t broke, don’t fix it.
Wed, Sep 3, 2008
Featured
The best online sites all have one characteristic in common that keeps the competition at bay: simplicity.
Google’s got a clean, no-frills text box that conceals the complexity of behind-the-scenes magic. Amazon keeps their users coming back with reviews, recommendations, and a giant inventory. And online classifieds site craigslist still boasts the most simple user experience of all minus the colorful ads, flashy video, and garish banners.
With an estimated revenue of $80 million in 2008 and a valuation of about $5 billion, craigslist has continued to keep venture capitalists salivating. Simply put, when it comes to traffic, they’re spanking the would-be craigslist killers, including eBay-owned Kijiji, Vast.com, and Oodle.com.
And it’s hard not to wince when remembering Microsoft’s oft-maligned Windows Live Expo, which shut down in July after a little more than two years of operation.
Lately it seems the competition is understanding that snatching away the die-hard craigslist loyalists is more laborious than finding a younger, more unfaithful audience on Facebook and myspace. Both eBay and Facebook itself have launched marketplace applications, and Oodle is powering myspace’s classified site.
But it appears that recently there have been a few cracks in craigslist’s walled fortress. Ebay, who owned a 28 percent stake in craigslist, was served with a lawsuit by founder Craig Newmark after launching their own version of online classifieds, Kijiji.com. Craigslist wants to force eBay to dilute its shares to less than 25 percent, but eBay isn’t budging. In fact, according to a CNET article, eBay’s CEO said he would happily buy out the remaining portion of craigslist shares to claim full ownership.
Considering craigslist’s aversion to change and their refusal to allow other sites to spider their content, I wasn’t surprised to hear Craig Newmark’s response to my question on if a marketplace application is in craiglist’s future.
“I wish I had more to say,” he said. “We just haven’t really considered it.”
So the point is, for the time being at least, if it ain’t broke, don’t fix it.
Experienced Commercial Broker
experienced commercial broker wanted for local valley website. Please contact me for more details.
Bmoney@hwy132.com
Bmoney@hwy132.com
Thursday, September 3, 2009
Just Communicate Something
Just Communicate Something
I’m far from perfect in my business methods, but one thing I’ve tried to do is maintain timely communication. Nothing is more frustrating to me than sending an e-mail or leaving a voice mail and not hearing anything for several days, and I don’t want to cause that frustration for someone else.
There’s a few reasons I can think of that someone would intentionally delay replying to a message:
Don’t have all the information at hand
Maybe you’re waiting on a little piece of information before replying even though you have most of what the other person needs, or maybe you’re not exactly sure what the solution to a problem that’s being experienced is. Either way, sending a quick message of acknowledgement will calm nerves and let the other person know you’re on it.
Avoidance
You knew this message would come and you know they won’t like your reply. They’re order is delayed, or something has been lost and can’t be replaced in a timely manner. Regardless, delaying a reply to avoid the situation can only make things worse.
Exerting Control
Not replying right away, or at all, could be a way of showing that you have more power than the other person. Replying could show that even though you have limited time you still reliably engage with employees and clients - improving your image and making sure you’re in the loop.
Procrastination
You read or hear a message and know you need to reply to it. You probably even think of what the reply will be. But you don’t send the message. By procrastinating, you waste a ton of time re-thinking about the situation or worse never getting it off your mind when you’re trying to focus on other more important tasks. If it takes less than two minutes, why not just reply to it now?
I think clients really do appreciate fast replies, even if the communication isn’t 100% perfect. You’ll be known as someone they can go to when they have a question that needs answering, have a problem that needs to be solved, or need an opinion about a potential new and exciting project (that you can then be chosen to work on!).
Or maybe there’s an even better way to show clients you care?
I’m far from perfect in my business methods, but one thing I’ve tried to do is maintain timely communication. Nothing is more frustrating to me than sending an e-mail or leaving a voice mail and not hearing anything for several days, and I don’t want to cause that frustration for someone else.
There’s a few reasons I can think of that someone would intentionally delay replying to a message:
Don’t have all the information at hand
Maybe you’re waiting on a little piece of information before replying even though you have most of what the other person needs, or maybe you’re not exactly sure what the solution to a problem that’s being experienced is. Either way, sending a quick message of acknowledgement will calm nerves and let the other person know you’re on it.
Avoidance
You knew this message would come and you know they won’t like your reply. They’re order is delayed, or something has been lost and can’t be replaced in a timely manner. Regardless, delaying a reply to avoid the situation can only make things worse.
Exerting Control
Not replying right away, or at all, could be a way of showing that you have more power than the other person. Replying could show that even though you have limited time you still reliably engage with employees and clients - improving your image and making sure you’re in the loop.
Procrastination
You read or hear a message and know you need to reply to it. You probably even think of what the reply will be. But you don’t send the message. By procrastinating, you waste a ton of time re-thinking about the situation or worse never getting it off your mind when you’re trying to focus on other more important tasks. If it takes less than two minutes, why not just reply to it now?
I think clients really do appreciate fast replies, even if the communication isn’t 100% perfect. You’ll be known as someone they can go to when they have a question that needs answering, have a problem that needs to be solved, or need an opinion about a potential new and exciting project (that you can then be chosen to work on!).
Or maybe there’s an even better way to show clients you care?
Wednesday, June 3, 2009
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