Sex ads give Craigslist $36 million?

Posted by Mike Luttrell

Sex ads on Craigslist provide about a third of the company's revenue, which will bring in $36 million to the simplistic online bulletin board. That's a problem for at least one attorney general.

According to the New York Times, Craigslist is projected to grow its revenue year-over-year by 22% in Fiscal Year 2011. However, the site still faces legal questions over the fact that people can easily use the unfiltered ad-posting site to seek out and advertise illegal activity including prostitution, or even human trafficking.

Toting the party line, Craigslist CEO James Buckmaster said, "Misuse of Craigslist for criminal purposes is utterly unacceptable."

Even so, sex ads alone could count for as much as $36 million of the company's projected $100+ million next year, according to media tracker Advanced Interactive Media Group.

As recently as last week, the FBI arrested members of a crime family accused of prostituting out underage girls as young as 15 against their will, through Craigslist. Posting an ad to the "adult services" section of Craigslist costs $10, and $5 for each time the ad is re-posted.

Any time an inappropriate or illegal ad is posted, Craigslist is often quick to take it down. However, the lack of filtering makes it possible for any ad to go live, if for only a few minutes.

"Of the thousands of U.S. venues that carry adult service ads, including venues operated by some of the largest and best known companies in the U.S., Craigslist has done the best and most responsible job of combating child exploitation and human trafficking," said Buckmaster. Craigslist has been able to hide under the Communications Decency Act, which protects Web site owners for what their individual users post.

Connecticut's attorney general Richard Blumenthal wants there to be a tigher lock on Craigslist. Other AG's have investigated the site but little action has been taken. Specifically, Blumenthal blasts Craigslist for pocketing money for ads even if they are taken down and deemed illegal. The majority of Craigslist's revenue still comes from individual contributions, but the sex ad market continues to grow, and that only provides more and more legal challenges.