When Craigs list started in 1995 to offer its various services to the public, it was taking on a huge risk. Although its presence is essentially online, its perceived battle against the more established newspapers, with respect to providing classified ads services, was similar to that of David vs. Goliath. Just like the biblical story, the underdog, Craigslist won the competition. Craigslist has successfully taken a large slice of the pie away from the newspaper companies. The stiff rivalry between the two forms of media persists up to the present time.

Not only was Craigslist able to establish its presence in the virtual world with its free services, but it affected the revenues generated by the different newspapers as regards its advertising capabilities. One of the major sources of income for publications is the advertisers who are willing to pay a certain amount just to be allotted some space for their print ads. Craigslist has provided a viable alternative to this practice. The preference for placing an ad in Craiglist rather than a generally circulated newspaper is more practical and sensible - it was a case of free vs. fee.

Advertising in Craigslist performs the same function as if you had put the ad in a newspaper, the former being the better choice since the service is without charge.