> I was wondering how they got that number; basically they use a $690M revenue guess from a third party, apply a valuation multiple from eBay and then multiply by the 42% Newmark owns.
It's not that dubious. The methodology is as simple and straightforward as it gets:
> AIM's Zollman, who called his company's Craigslist revenue estimate "conservative," said the AIM Group counts up listings for each category in various markets and then multiplies that by the known fee associated with that listing. (Fees can range from $7 to $75 per posting, depending on location.)...As the founder of 3Taps, Kidd built an interface for programmers that pulled classifieds data from Craigslist and was able get an accurate picture of the total number of listings on the site. He published a 2011 white paper that pegged Craigslist's annual revenue at $300 million, a number he said has certainly risen as Craigslist has increased or rolled out more fees.
This is hard to screw up, and if anything, counting listings ought to be a drastic underestimate - crawls of a hostile large high-turnover website will be incomplete, and Craigslist has other potential revenue sources like selling feed data to hedge funds or real estate or HR agencies.
This makes it all very puzzling. As the quoted employee says:
> "Eventually we realized we were making a lot of money and it was more than we needed to just cover costs," the employee said, noting at one point in the early 2000s Craigslist was making $40,000 a day on Bay Area jobs ads alone. "We could all do the math, and we'd wonder where all the money would go."
So CL is making at a bare minimum $300 million a year by 2017, of which a large fraction is profit; the few employees say there are no major capital investments a la Amazon (and no one has ever pointed to major software or hardware investments attributed to Craigslist that I've ever seen), and you never hear of Craigslist billionaires or millionaires aside from Newmark, so the profit isn't simply being spent on datacenters or employee stock compensation; thus, around half would go to Newmark if it's distributed as dividends, so he could have an income of easily >$50m a year over the past 7 years after taxes or >$350m on top of whatever he earned before 2011 on that increasing revenue. The Craigslist Charitable Fund is disbursing $10m/year or less (and donations to that wouldn't be taxed), so that leaves >$300m (7 * 50-10). But Newmark claims to be worth much less than $400m total. So... where does it all go?
It's hard to see how two different groups counting listings could be high by an order of magnitude, what Craigslist could be spending it on, or what Newmark is spending it on, unless he's making huge anonymous donations every year through other nonprofits (but why avoid his own CCF?) or simply lying (for privacy to avoid the attention or maintain his self-image, or just in order to make look bad "a fake market intelligence group who I won’t name").