Thursday, September 24, 2009

craigslist fundamentals: why the AIM group's estimate of revenue is a poor indicator

The overall revenue masks the fact that craigslist has been adding to the jobs-pay-list and started charging in the very lucrative adult/erotic category. A more meaningful presentation of Zollman's numbers would compare revenue from *the same markets*.

By the time you throw out all revenue from adult/erotic as well as the revenue from jobs in places where craigslist didn't charge last year, craigslist's fundamentals wouldn't look anywhere as good.

They are very likely loosing ground (currently have less paid jobs listings and real estate in the markets where they charged last year when compared with the number of such listings in those same markets this year)


Monday, September 21, 2009

craigslist revenue: the AIM group's report credibility and limitations

DELIA: oh... I believe you! It was just very confusing given that I *knew* I saw the word "will", otherwise I would not have given it much importance ("could" is very weak as far as I'm concerned) D.


I can assure you that the version submitted to the court was the "could" version and you can seek a copy from the court if you wish.

Posted by Anonymous to craigslist criticism at September 24, 2009 10:50 AM

Twitter: @agaricus got it figured out, Gary! ~D.14 minutes ago from web

DELIA: found the other version! it was at a slightly different url address:

as opposed to:

sorry about the confusion! (the argument section -- see table of contents -- has A through K subsections as opposed to 1 through 3 in the other version)

MORE: Twitter

(Dart v. Craigslist) CATW's amicus brief Did anybody followed the link to amicus brief on CATW's site last evening or before? please help!2 minutes ago from web

@agaricus Gary, I could really use your help! did you follow the link to the amicus brief on CATW's website before contacting Peter Zollman?2 minutes ago from web

DELIA: that's wild! they are the same NOW (just looked), although as recently as last evening the two links had different versions. The initial one I first saw may have been a prior draft but that's the one CATW linked to when the item got on Google news so I suspect plenty of people saw that and went with it), not only for the spot I referred to -- they had a different organization for the arguments (the sentence I pointed out was not at all *the only* difference)

ANONYMOUS: "I am sorry but that just is not true. The brief that was submitted to the court says "could" as does the brief on CATW's web site at:

Posted by Anonymous to craigslist criticism at September 24, 2009 8:56 AM

DELIA: yeah, those are the links and... it's NOT the same stuff...

the passages talked about, although worded identically otherwise are qualitatively different where it counts, as I explained bellow.


K. Craigslist's Profitability, Power and Corporate Responsibility
(end of 1st paragraph of subsection)

"Projected over a year it is fair to estimate that craigslist's global profits from its adult/erotic services ads *will" constitute over half of its profits" [my emphasis]



(middle of last paragraph on 2nd to last page of that subsection)

"Projected over a year it is fair to estimate that craigslist's global profits from its adult/erotic services ads *could" constitute over half of its profits" [my emphasis]

STILL MORE: thanks! got two anonymous comments, the second shortly after the first; it's unclear if it's the same person or two different ones (I wish anonymous posters would be given numbers such as Anonymous 1, Anonymous 2 etc.)

(1st comment)

This is the brief that was submitted to the court:

This is the Sheriff's complaint from March:

Posted by Anonymous to craigslist criticism at September 23, 2009 7:14 AM

(2nd comment)

The brief posted on CATW's web site is the correct version submitted to the court Aug. 6, 2009

Posted by Anonymous to craigslist criticism at September 23, 2009 7:17 AM

EVEN MORE:(Dart v. Craigslist) CATW's amicus brief - which form was actually submitted? what was the exact wording?help! ( ~Delia3 minutes ago from web

MORE: if anybody else is confused about it, it's unclear to me which version of the amicus brief did CAWA submit: there is a significant wording difference ("will" vs. "could") between the one posted on their website (which I linked to and was familiar with) and the one anonymous linked to. "Will" is a very definite statement, while "could" is as weak as it can get (I mean, pretty much *anything* could be the case...)

As I told Gary Wolf, I don't think we'll really know what's going on with craigslist until their books are open to the public. The host of issues brought up by the AIM's group estimate of craigslist's revenue reinforces this belief.

Again, I have not been able to take a look at the report myself so I don't really know all that is in it. I would hope an explanation of its great limitations is given upfront -- in fact, I believe these limitations should be pointed out to anybody interested in purchasing and/or using the report. I somehow assumed that such a report would go through the equivalent of a pier review but that does not seem to be the case.

And anonymous is right to point out that Peter Zollman has expressed personal opinions that appear to make him a less than ideal person to do the counting -- maybe he should have recused himself?

If anonymous is correct and Chicago alone brings 1 mill a year, the whole thing would, at first, seem to be bogus (if the numbers given by Peter Zollman cannot be trusted). But when were the two different countings done? If one (for the Dart v. Craigslist law suit) was *before* the changes and beginning to charge and the second - Zollman's -- *after* the changes they could both be accurate.

Another problem is the fact that I would not expect the number of ads in those category to be constant from month to month: there would have very likely been a drastic drop right after changes were implemented, and a steady growth thereafter.

Aside from this, if the AIM group is estimating *the 2009 calendar year revenue* for craigslist (which appears to be the case), it seems to mistakenly treat the adult/erotic as bringing in revenue for *12 month* (Peter Zollman quote towards bottom of previous entry on this blog)-- craigslist has not been charging in that category from the beginning of the year so craigslist's revenue for 2009 would be overstated by a significant amount.

Now, if we are concerned with the adult/erotic *share* of craigslist's revenue, you would have to look a year out at least from *when craigslist started charging*, otherwise the comparison with the total revenue for a year would be deceiving. A much more accurate estimated would probably be obtained if the "transition period" would be thrown out of the calculation altogether.

Also, I have no clue why did Peter Zollman count automotive ads (quote towards the end of my prior entry on this blog, when he talks about why the estimate was conservative) -- although craigslist has been steadily adding to the jobs-pay-list in recent times, it has not charged in the automotive categories *anywhere*, nor is it reasonable to believe it will by the end of the year. So how could those numbers be at all relevant?

re: craigslist profiting from erotic ads even before they were charging... yeah, I thought so too, especially when I saw the first evidence of just how important a share of craigslist's overall traffic was brought by those ads and more recently when I saw Jim Buckmaster seemingly unhappy about loosing those ads to other sites...


P.S. As always, further comments are encouraged from all parties and all points of view! D.

Tuesday, September 15, 2009

Peter Zollman on the reasons the AIM group's estimate of craigslist's revenue from erotic/adult services is conservative


ANONYMOUS COMMENT: Thanks, Anonymous! ~D.


One aspect to think about that I do not think was explained/captured in the report was how web traffic allows craigslist to charge up to $75 for housing/job ads. If you read the original complaint in Dart v. Craigslist, that complaint was made before craigslist started charging for erotic and adult ads. In other words, even if Craigslist did not charge for adult/erotic, the fact that those sections drive traffic to its web site allows it to charge $75 for jobs. So it was profiting before it was charging for ads. How much is very hard to say, but critics will say that this is why craiglist does not want to do anything about erotic/adult ads."

Posted by Anonymous to craigslist criticism at September 21, 2009 2:00 PM

STILL MORE: Thanks to those who sent reassuring words but... I'm not done with it yet:) Twitter: (AIM group report) Did craigslist' revenue *really* grow last year? last call for comments, will post my take on it tomorrow evening ~Delia half a minute ago from web

MORE: Twitter: (craigslist revenue, AIM Group's report) @agaricus Gary, was it bogus? did you check for obvious signs? please help! ~D minutes ago from web

CORRECTION BY ANONYMOUS: "Just to clarify, Chicago alone brings about 1 million per year (not per month) based on adult ads alone." Posted by Anonymous to craigslist criticism at September 16, 2009 9:24 AM ... Thanks, Anonymous! D.

MORE: Twitter: (craigslist's revenue from adult/erotic services, AIM Group's report) was Peter Zollman biased? please help! ~Delia ( minutes ago from web

"Dear Delia,

CATW did not base its projection on the AIM report alone. On one day in Chicago alone I have counted 300 ads for adult services. So Chicago alone gives craigslist more than one million a month, easily. In a smaller city like Houston, it is more like 100 ads per day. Even taking only 10 major cities, that is much much more than 2.5 million per month. CATW stated very clearly in its brief submitted to the District Court of Illinois:

"Projected over a year, it is fair to estimate that craigslist's global revenues from adult/erotic services could provide over half its profits."

Here is the link:

Now if you are going to talk about bias and "concern" about estimates how about Zollman, who on the one hand blogs about how absurd it is that the Attorney Generals should wish to hold craigslist accountable, but on the other hand purports to write an objective, "conservative" report detailing craigslist's profits from adult/erotic services."

Posted by Anonymous to craigslist criticism at September 16, 2009 8:29 AM

Thanks, again, Anonymous! I'll give Zollman a chance to answer this first. (might take a while; will post if I get something or respond myself if Zollman declines) D.

DELIA, AGAIN: sentence in the amicus brief that suggests that CATW *did* in fact calculate as Anonymous suggested (times two) and Peter Zollman hinted at the bottom of this entry that it was incorrect: "According to the report prepared by the AIM Group and released on Jun 10, 2009, craigslist's projected revenue from *"erotic" and "adult services" combined* for one month only amount to only over five million".[my emphasis] (end of page 29 of amicus brief) D.

MORE: Twitter: craigslist's revenue from erotic/adult compared with total: was CATW's projected yearly estimate fair? please help! ( a minute ago from web

DELIA: Although, we are ultimately concerned with *the ratio* of craigslist's yearly revenue from adult/erotic ads to craigslist's toatal revenue from all ads: CATW says, in their amicus brief, that it is fair to project the estimates so that more than half of the money is brought by erotic/adult ads.(end of page 29 of the amicus brief)

I suppose that is still possible, but it would have to have a different justification than the one Anonymous gave, given that Peter Zollman says he did not count the erotic/adult ads in other markets.

Further comments encouraged from all parties and points of view! I was hoping we could get somebody from CATW so they can clarify their position but no luck so far -- if anybody could help with that, I'd appreciate it! D.

ANONYMOUS RESPONSE: "Both erotic and adult, according to that report, made over 2.5 million a
month, each. That means times two. Adult is only for the USA, erotic is for sex trafficking in Vietnam, etc. You should look at the web site you are writing about. The report does not explain this well, because craiglist does not explain it well, and it does not wish to."

Posted by Anonymous to craigslist criticism at September 15, 2009 6:14 PM

Thanks again, Anonymous! As far as I can tell, craigslist does not currently charge for "erotic services" in places like Vietnam (did as much as I could to check that, short of posting a fake ad, which I would not do); will they charge in those markets within a year of starting to charge in the U.S.? (as to count for the yearly projection?) possibly... although I believe it it reasonable to assume they would not be quite that dumb! but *could be*... However, I believe it is important to keep the estimates/projections/etc. within reason, otherwise it appears to backfire and become meaningless at some point as I said bellow.

It is my current understanding that Peter Zollman (please see his explanation of why their estimate is conservative bellow) did not count those ads in markets outside of U.S. If this is correct (and I'm sorry but I cannot get a copy of the report for my editorial use without paying for it or giving up my privacy, both things I decided a long time ago not to do), it is unfortunate that CATW misread the report. And I do hope that was the case, that they did not misinterpret it *on purpose*.

If the report was unclear, you'd think they could/should have clarified things with Zollman before putting the info in the amicus brief to make sure they were using his report fairly. This would have also made sure it did not backfire which could ruin everything they are trying to do. I regard CATW's not giving Zollman's conservative estimate ($30 mill, not $60 mill, as in his hint to you bellow) as a mistake given that I believe Zollman's conservative estimate would be more than enough to show there is good reason for serious concern.


MORE: I don't know if it's just me (Delia) but it seems to become meaningless at some point if it's all a matter of what people *want* to infer... D

"We’ve stated unequivocally that we think our estimate on Craigslist’s adult services (previously “erotic services”) is fairly conservative, because we did not count ads in all markets (as we did with recruitment and automotive). Thus, you’re welcome to infer if you wish that revenue in that category is $60 million or $90 million or whatever. But we don’t."

from email exchange with Peter Zollman on September 15th, 2009 (published with his permission)

also a hint for anonymous from prior entry: "$2.55 million a month times 12 months, by my calculator, is $30.6 million annually. So I think your $60 million is off by a factor of two."

from email exchange with Peter Zollman on September 15th, 2009 (published with his permission)

(I, Delia, agree but feel free to submit a rebuttal comment, Anonymous -- from prior entry -- or anybody else)

Friday, September 11, 2009

Did CATW misrepresent the AIM group's findings about craigslist revenue from adult/erotic services?

MORE (Peter Zollman's hint to Anonymous and reasons why the AIM group's estimate is conservative)

EVEN MORE: Twitter: @ptrueman Patrick, I'm wondering if you can help -- Gary Wolf of Wired says
CATW was wrong in the amicus brief ( D.1 minute ago from web in reply to ptrueman

STILL MORE: got an anonymous post -- take it with a grain of salt; thanks, anonymous!

The AIM Report estimates that erotic earns $2,550,000, a month, and adult similarly earns $2,550,000 per month. That this will amount to over 60 million a year, not taking into account the explosion in the number of ads in cities all over the map, means that it is a fair estimate.

Posted by Anonymous to craigslist criticism at September 15, 2009 8:29 AM

EVEN MORE: now *that* didn't work... I mean I got an answer last Friday --sorry about the delay --(thanks if anybody helped out with that) but no useful info; just to clarify for everybody I derive no profit from my online presence, so I do not intend to spend money on gathering info nor do I advise anybody who is just curious about craigslist to do it...D.

MORE: Twitter: Did CATW misrepresent AIM group's findings about craigslist revenue from
adult/erotic services? --please help! ( ~Delia 2 minutes ago from web

If so, I will not use them as sources in the future; it was brought to my attention by Gary Wolf (part of his first comment, well, actually second comment but 1st published within my prior entry on this blog) although I took his giving 120 million as craigslist revenue (60 mill times two) when Peter Zollman's article was talking about craigslist hitting 100 mill in revenue as a red flag that Gary may have been mistaken himself in some way.

To clarify things, I tried to contact Peter Zollman directly but so far no luck.

Here's what my request was:


I'm hoping you could clarify something for me. Did CATW misrepresent your findings about craigslist revenue from erotic/adult services in their amicus brief? Or were they correct?

re: "Projected over a year, it is fair to estimate that craigslist's global profits from its adult/erotic services ads will constitute over half of its overall profits"

(end of 29th page of the brief)

Thank you!


if anybody can help out and bring this to his attention I'd appreciate it D.

Wednesday, September 9, 2009

Gary Wolf's follow-up comments -- in full glory!

MORE: agaricus@ Gary, I'm giving you the benefit of a doubt -- don't make me regret it! ~Delia ( will check tomorrow eveninghalf a minute ago from web


I'll give you the benefit of a doubt although good chunks of your follow-up comments look like personal attacks to me and I really don't have to put up with them or publish them on my blog for that matter. Nor do I think they are flattering to you but since you insist I publish them, I will. So please abstain from those if you would like me to publish any more of your comments on my blog.

As I previously told you, I believe you would benefit a lot from taking a break from this topic for now and returning to it at a later time when you could truly take a fresh look at it. I would be willing to continue this per your request at the point when you realize that those eight things I listed are fundamental assumptions. We don't have to agree that they are probably false – as I believe they are -- just that they are assumptions. If you do not agree that those are assumptions -- that, at this point, they are not positively knowns or unknowns -- there is little point to continuing this from my side as I don't believe much could be accomplished.

If you just want to go ahead and check the things I put down – be my guest! It's a public blog... And you may well find that some of the sources I quoted were fallible. I'd be surprised if over the years I've written this blog, all of my sources would be absolutely infallible. Heck! I have certainly not redone the data analysis done by AIM Group, for instance, so I cannot vouch that they are absolutely correct.

I referenced CWTA's amicus brief and if they were wrong, then my source was wrong. But the link is there for anybody to check and I gave the exact location on the page to make it as easy as possible. Still, unless those sources were absolute frauds it's hard to see how it would make that much difference -- the fact of the matter is that a big chunk of craigslist's revenue comes from erotic/adult ads and even Craig has acknowledged that many of those are probably prostitution.

As far as I can tell, unless craigslist's books are open to the public (as a result or law suits or much less likely, voluntarily), the big issues will remain unknown – they are NOT the checkable ones. The major flaw in your article was presenting very important things about craigslist that are unknown as being undoubtedly known. And until you get beyond that, I don't see that much progress can be made.


P.S. Just to clarify, my posts are not intended as “tips” -- they are just my opinion of things with links to my sources when the topic is amenable to it. D.

Here are your 2 follow-up comments unedited (your first comment published in the body of the initial blog entry was also unedited)

Reading your response, I have to note the absence of any new information, testimony, observations, etc. to support your implications of bad conscience on Newmark's part. Just for the record, saying "I've committed myself in writing to the story as I understand it" means that I've told everything I know that I think is important, exactly as I believe it to be the case. The key words here are "committed myself in writing." This means that if I am wrong, and any evidence emerges that I am wrong, my error will be visible for all to see. You repeatedly ask leading questions, as if there is some hidden wrong that it is my responsibility to expose, without offering any evidence to support it. That's effective over the short term - certainly I read your posts with interest when reporting the story. But after many requests to provide something concrete to back up your negative remarks, you still produce nothing that a responsible person would publish in any forum where he had to take moral responsibility for his statements. This makes me conclude that there's nothing here of interest. But it's only a provisional conclusion, and as I said in my first comment, I'm certainly willing to listen if you ever come up with anything.

I should say that the one fact you stated in your first post is incorrectly cited and almost certainly wrong. The footnote to the amicus brief you cite in support of your assertion that craigslist makes more than half it revenue on adult/erotic ads references the AIM report. I remembered looking at this report but didn't remember this figure, and I've now had a chance to look at it again. The AIM estimate for adult/erotic is about 29 million, not 60 million. That's just for what its worth: I do not morally condemn craigslist for taking these ads.

Posted by Gary Isaac Wolf to craigslist criticism on September 1, 2009 8:48 PM

Dear craigslist criticism,

I have checked the figures you cite directly with the source listed in the footnote of the CATW brief. That source, Peter Zollman of the AIM group, also projected his numbers out over a year. This is a somewhat minor point, but given that it is the only checkable fact that you cite, it is significant that you got it wrong.

You might sensibly ask why I even bother with this conversation. The answer: a long history of getting useful information from biased sources like yourself leads me to treat your assertions as a kind of "tip." That's the beginning of the process, not the end of it. In writing about cl, I will try to track down any claim that you make that can plausibly be tracked down. But it is hardly my fault if the evidence doesn't back up your allegations. If you ever have any support for any of your claims I would be happy to try and corroborate it. I'm pretty dogged, and if you care about the truth you ought to treat this offer as something valuable.

It doesn't bother me that you publish these vague accusations anonymously; plenty of people do this, sometimes for good reason. But this doesn't give you a free pass from having your claims evaluated. So far, nothing you say pans out, by normal (or even minimal) standards. That's my conclusion, reached in good faith, and with a continued openness to being corrected if, someday, you ever do have evidence for what you say.

Finally, I would like to challenge you, since good faith is one of your values, to publish this comment unedited.
Gary Wolf
Contributing editor, Wired

Posted by Gary Isaac Wolf to craigslist criticism on September 9, 2009 10:41 AM

(craigslist profits/revenue) meaningful comparison of overall figures and figures from adult/erotic services

I did not think most people would need this clarification (certainly not journalists) but the few exchanges I had with Gary Wolf of Wired made me think I better put it down.

#1 -- given the huge difference of magnitude between craigslist's profits and their expenses, the figures for revenue and profits can be used interchangeably (of course, they are not *technically* the same but it's a fair approximation since the expenses are negligible)

#2 -- since craigslist started charging for adult/erotic services less than a year ago, CATW fairly estimated the revenue/profits for adult/erotic services in their amicus brief by projecting it over a year (so it can thus be meaningfully compared with the yearly overall revenue/ profits)