Craig Newmark and Craigslist didn't destroy newspapers, they … – USA TODAY

Craig Newmark, the clever entrepreneur behind the eponymous Craigslist, gave $20 million to the City University of New York’s Graduate School of Journalism this month and immediately found himself under fire from, among others, journalists holding a grudge.
“Ironies abound because it was Craigslist, which accelerated newspapers’ loss of classified ads,” tweeted William Marimow, former editor of both The Philadelphia Inquirer and The Baltimore Sun, as well as a veteran journalist in the 1980s and ’90s, when newspaper profits were fat and happy.
“This is a generous and welcome gift. But it’s utterly bizarre to name a journalism school after the man who almost single-handedly destroyed local newspapers,” financial journalist Felix Salmon tweeted
Another journalist, Michael Moyer of Quanta Magazine, gave Newmark a nod, but added, “Let’s not forget that Craigslist destroyed local journalism by siphoning off all the classifieds.”
But Newmark, who founded the free, no frills online bulletin board in 1995 in San Francisco, is the wrong culprit.
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It’s convenient to lay blame on him. But the gentle, generous 65-year-old, who has already given millions to help save journalism, deserves better.
He was prescient; the news industry was not. He saw the promise of the internet and how convenient and cheap it could be to advertise a car, find a place to live, or look for love online.
The newspaper industry has been in trouble for a long time chiefly because owners and executives were greedy and shortsighted. The advent of the internet, corporate consolidation, changing readership habits, greed and other factors all played a role in the decline in newspaper revenue. Most newspapers chose to preserve profits and cut costs, which often meant shedding staff and trying to do more with less at the expense of quality journalism.
While innovators like Newmark were harnessing the internet and later social media, newspaper executives were frantically searching for new ways to maximize profits — even though that was unlikely on the internet where a banner ad would sell for about one-tenth of a full-page display ad in a newspaper.
For decades, the newspaper industry relied on boatloads of revenue from paid circulation, display advertising and classified ads to run the presses. Before the internet became mainstream around 2000, many newspapers raised their advertising and classified rates yearly because they were the only game in town. Advertisers and consumers sometimes paid usurious rates because newspapers were the best (and often the only) way to reach a local audience.
Before Craigslist, Autotrader or, where else would you go to find a used Chevy with a stick shift?
Newspaper profits in the ’80s and ’90s were legendary. Newspapers, the joke went, were a business where even the brain-dead could make a lot of money. The average operating margin (a measure of profitability) for publicly traded newspaper companies in 1997 was 19.5%! Gannett, often ballyhooed as the gold standard for profitability, was 26.6%. Warren Buffett’s Buffalo News sometimes hovered in the 30s.
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Craigslist most assuredly ate into those obscene profits, but that’s not Newmark’s fault. He offered a better, cheaper, easier to use product. That’s how it works in America.
“Craig was not to blame for the decline of newspapers,” said Jerry Ceppos, former executive editor of the San Jose Mercury News and former vice president for news of Knight Ridder. “He did what every Silicon Valley entrepreneur has done. He spotted a need in a slow-to-change industry and filled that need. Newspaper folks on both the business side and the editorial side failed to realize they had a problem, and some still fail to realize it, but he recognized it.”
Ceppos noted a different irony than journalists who whine about Newmark. In the old days, when a newspaper was losing in a competitive situation, free classifieds were offered to build up advertising and readers. “Craig took that idea and ran with it,” he said.  
In 2000, 40% of newspaper revenue came from classifieds. Twelve years later, that figure plummeted to 18%, according to the Newspaper Association of America. It’s never going to go back to 40%.
Some complain that Newmark should atone, acknowledge or pay for Craigslist’s disruption. They think Newmark should feel guilty. That’s crazy. Should Mark Zuckerberg atone for disrupting Friendster or hundreds of other similar people-connecting sites? Does Google, which has 82% of the desktop search market, owe Microsoft’s Bing (which started strong but now has only 7%) for “ruining” its search business? 
“Certainly, Craigslist was an important factor, but the larger issue was around recognizing and reacting quickly to the disruption posed by the internet and digital,” said Peter Bhatia, editor of the Detroit Free Press. “Today, we need to keep plugging onward at finding ways to bring in revenue from digital advertising.” 
Ironically, Craig Newmark is willing and financially able to help train the journalists of the future to find those ways. We should be thanking him, not attacking him. 
Alicia Shepard, a member of USA TODAY’s Board of Contributors, is a longtime media analyst and a former ombudsman for NPR. Follow her on Twitter: @Ombudsman


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