Craigslist Ban May Not Silence Critics

Craigslist's shut down of its adult services section may not be enough to satisfy critics who believe the Web site still offers a business platform for prostitutes.

Craigslist caved to pressure over the weekend and took down its adult services section after attorneys general from more than 17 states led a crusade against the site's sex ads.

A black bar with the word "censored" is now in place over the adult services section.

The move comes after years of pressure and a critical open letter from the 17 state attorneys general in August.

It is not clear if the shutdown of the section is permanent, since Craigslist is refusing to comment.

The site is also allowing people to post sexually explicit ads in the Casual Encounters section.

The adult services ads, which cost $10 to post and $5 to repost, were expected to bring in over $44 million this year.

The Federal Communications Decency Act protects web sites against liability for what their users post on the sites.

it's not clear what influence this law will have on the future of Craigslist's ads.

So the adult section may be gone but that's not necessarily keeping suggestive ads off Craigslist.

Fox 29 asked attorney Fred Tecce about future of the popular site.

"It's interesting about a year ago Craigslist said if you shut down this one section all these explicit ads are going to start popping up in other sections," Tecce said.

"And if you go to craigslist now and look that's exactly what you see, you see naughty little ads popping up in these different places."

Teece said Craigslist still faces a legal battle.

"Craigslist could see trouble in a lot of different arenas. First of all if the attorneys general come to the determination that Craigslist didn't do nearly enough to ensure that they're not implicit or play a role in prostitution or other types of crime that could lead to potential criminal liability," he says.

"If there's another killing if there's anything else that happens as a result of Craigslist and as a result of their failure to take sufficient action than they very well could be held liable, there no longer in a position to say hey we didn't know."

A marketing report in April claimed the Web site craigslist.com made $36 million this year from "adult services" ads, which researchers call "thinly disguised advertising for prostitutes."

Highlights of the research report are in a blog from AIMGroup.com, an Internet research firm.

Peter M. Zollman, founder of the AIM Group, says the report is the first detailed look at where craigslist.com makes money - and that the company is incredibly profitable.

And much of the profit growth comes from adult ads.

"We're astonished at the explosive growth Craigslist continues to show, even in a very tough economy," said Jim Townsend, editorial director of Classified Intelligence Report and the AIM Group, in the blog post. "For 2010, its `adult services' revenue will be three times the revenue it generated in that category in 2009."

Zollman says craigslist.com generates more than $4 million in revenue per employee and profits of $2.9 million to $3.2 million per employee.

Zollman says craigslist will generate an estimated $122 million in revenue in 2010, with 30 percent of the money coming from adult services.

Another 17 percent (almost $21 million) of revenue comes from apartment ads in New York City, while the other 50 percent of revenue comes general recruitment ads.

Also in April, an interview with craigslist.com founder Craig Newmark was published on the Web site True/Slant with journalist Jonathan Curiel.

Newmark says activities on the Adult Services section of craigslist.com reflects what happens in a similar large congregation of people.

"We just don’t tolerate (illegal services). I’ve worked with a lot of cops. They point out that (the number of people who use) Craigslist is the equivalent of a major metropolitan area, 50 million people, and that we have a very low crime rate.’

In reaction to a report in the New York Times on the AIM Group research, Jim Buckmaster, Craigslist CEO, told the Times that craiglist is not doing anything wrong.

"Of the thousands of U.S. venues that carry adult service ads," Buckmaster told the New York Times . "Craigslist has done the best and most responsible job of combating child exploitation and human trafficking."

But in August, the attorneys general for 17 states demanded that the Web site end its use of the adult services section.