Newspapers create their stream of revenues by:
Revenues from advertisements can reach up to 70% of the total revenues. The effectiveness of an advertisement is directly related to the sheer number of people that will expose to it. A high circulation newspaper is more effective and thus will attract more ads. According to this business model and due to the fact that ads have been so profitable for the newspapers, price of the paper could be kept low compensating the loss with revenues from attracted ads. But the last decade the revenues from ads have been reduced dramatically as both the graphs shows:
This fact can be attributed to many factors. The rise of media like craigslist, have shifted a big part of the classified ads away from the newspapers. Off course a drop in their circulation is another significant reason. Business model of Graigslist
The business model of Craigslist can be analyzed to its components: Mission statement or activity:
an online community featuring free online classified advertisement related to jobs, housing, sales of a variety of product and services, gigs resumes and discussion forums. The way of doing business:
Their source of revenues are charges to employees for paid jobs ads in cities like Los Angeles, San Francisco and New York where also charges real estate brokers. It manage to have a low cost operation due to the fact that is not have a marketing, sales department, promotion or advertising department while the operation run only 30 employers. The use of open source software like Linux is another indication of the focus been paid to a low operating cost in order to fulfill the main objective of the business which is to satisfy users providing a free service based on trust and simplicity. Because of this laisez faire model of doing business, both the founder and CEO of the company repeatedly had declared that actually there is no business model. Values...