2) Change paradigm

The operators of CraigsList are not out to make a buck, they’re out to make a point. And this is their biggest weakness. Once newspapers accept their lesson, we can make more money than CraigsList.

Here’s the lesson (using the CraigsList definition of a classified).

Classifieds are content, not advertising. Classifieds are placed by readers, not advertisers. If ever the newspaper industry made a miscalculation, it was mixing up its readers with its advertisers.

Listen to the CEO of CraigsList, Jim Buckmaster, as he explains to The Wall Street Journal why his site charges some businesses for listings:

“We're much more comfortable charging companies than charging individuals. Businesses are better equipped to afford a small fee and businesses can pay for fees out of pre-tax dollars where on average users are less able to pay a fee and they have to pay in post-tax dollars.”

Tomorrow's entry: Step No. 3, Identify the Actual Advertisers