Note to Steve Ballmer...and what would I buy...Craig's List..?

The other day I was interviewed by a bright young woman from Microsoft. Her topic was about influencing start-ups. We had a great time talking and mid-way through the conversation I had a bit of an epiphany.

She was asking me the best as to my thoughts on the best way of reaching start-ups and I said “Craig’s List” and after I thought for a moment longer, I said to her, instead screwing around with Yahoo, Microsoft should buy Craig’s List.

I had just read an article by Noam Cohen in the New York Times, entitled “Craig (of the list) Looks Beyond The WEB”.

In the article there is a remarkable graphic, e.g. here, which shows the penetration of Craig’s list into towns that are smaller than 20,000 people.

I think I read where Craig’s list grossed $80m last year with 25 people on their staff, not bad. I am sure there those who will argue that Craig’s List is not for sale, my guess is that with some of the dollars allocated to the Yahoo deal, Microsoft could find a way to buy something that everyone uses. They could easily clean up the UI, and have an incredible platform on which to advertise.

The whole idea probably makes way too much sense. I probably need to take a nap and pretend this was just a dream.

 

Comments

[Mike]

I think it's a creative idea, but I don't think it makes sense.

What makes Craig's List great is the non-corporate look and feel to it. It's an organic site - one that is trusted precisely because it is not obviously part of a large organization trying to make money. It has also focused on anonymity and registrationless-access - something you can only do if you've got a business model that doesn't require you know who your users are.

Microsoft, on the other hand, needs web properties to augment search and its advertising network. If Microsoft tried to incorporate Craig's list listings into its search, or if Microsoft tried to place advertising on Craig's list, it would radically alter the feel of Craig's list. And of course, a Microsoft or Live logo would be very difficult to pull off.

I'm not saying it would be impossible, but I do think the branding issues between what Microsoft needs and what the Craig's List community needs are radically different. It would be very difficult to meet both needs in a combined entity.

So Microsoft could buy it and fund it, and make $75M/yr in profit off of it. Maybe they could grow it in a white-label way to a $150M/yr business. But that's not going to move the needle for Microsoft.