Newspapers brought financial woes upon themselves, says Craigslist boss

The newspaper industry has brought its financial troubles on itself, according to the chief executive of Craigslist, the company that has been accused of decimating the newspaper industry's advertising business.

Jim Buckmaster told weekly technology law podcast OUT-LAW Radio that his business was not responsible for publishers' problems. He said that a focus on money and profits has in fact damaged their business.

"I think it's exaggerated to say that Craigslist has had a devastating impact on classifieds revenue," said Buckmaster. "Newspapers as an industry are still twice as profitable as the average United States industry."

Newspapers had a pre-internet monopoly on readers' attention which meant that classified advertising became an extremely profitable part of their business. Since the advent of classified advertising, online margins have been eroded. Since the almost entirely free Craigslist became utterly dominant across the US, publishers say margins have plummeted.

"Journalism as practiced at newspapers has been hurt by an excess of money over the years as you've seen newspapers bought and sold and consolidated into large chains run by corporate managers to maximise profit, and increasingly over decades have resorted to running wire stories, putting an ever-greater proportion of advertising into their newspapers and shying away from writing hard-hitting stories about corruption in high places," said Buckmaster. "The financial position of newspapers has not declined, it has more plateaued."

Craigslist is run on unique lines. Though it is a company and it does generate profits, the aim of Buckmaster and company founder Craig Newmark is explicitly not to earn money. "Our goal is to maximise utility for users, so we concentrate on doing what users ask us to do and little else. We do want to run a healthy business and we do have a healthy business, but beyond that maximising profits and revenues has never been a primary goal. It's unfathomable to the financial community and Wall Street, it's antithetical to their whole world view, it's sacrilegious."