Thursday, December 16th, 2004
The dotcom bubble burst in 2000, but the revolution is only just beginning. Witness the impact of Craigslist.com on San Francisco’s rental market. SFGate reports:
Homefinders, a family-owned firm that billed itself as “the East Bay’s oldest and largest service for rentals since 1970,” closed its Shattuck Square office this week and pulled the plug on its Web site, leaving scores of customers in the lurch and a handful of employees without jobs.
“This type of business just isn’t viable anymore,” said Dana Goodell, 42, who bought Homefinders five years ago from the founders, her father and uncle. “In the boom days, there were thousands of people coming here from all over the country. After the dot-com collapse, there was a surplus of apartments.”
Listing services, which typically charge tenants a set fee, also have succumbed to the great equalizer known as Craigslist.com. The familiar online clearinghouse lets visitors advertise apartments, used furniture, concert tickets or themselves for free. Only employers posting jobs pay fees.
A boon to consumers, Craigslist has proven a thorny problem for those who try to make money by publishing ads for workaday necessities.
“You can’t compete with free,” Goodell said. “Our market niche is over.”
Goodell, who said the firm’s payroll swelled to more than 30 around 2000, released the remaining three employees last week and plans to file for bankruptcy.
RentTech, which bought Berkeley’s Rental Solutions about five years ago, closed earlier this fall. Two other rental services — San Jose’s Home Renters Guide and Berkeley Connection — were purchased and folded into San Francisco’s MetroRent in 1999 and 2000.
Craig Newmark, founder of Craigslist, is ambivalent about his site’s influence, widely cited for the apartment listing industry’s consolidation. “I’m personally bothered by the loss of jobs,” Newmark said. “But a lot more people benefit” when the Web replaces information middlemen, he said.
I talked with Craig last week in Boston. He’s got 70 servers and does an estimated 1.4 billion page impressions a month. “It is hard to know exactly, because we’re very cache friendly,” he said. Roughly 1/3 of his impressions are in SF. (To put his traffic in perspective, NYTimes.com does roughly 450 million impressions a month.)