Q. How does Craigslist make any money when all the ads are free?
All the ads are NOT free. In certain categories, ads do cost money. Most Craigslist sites, especially in bigger cities, charge companies to advertise their jobs on the site, and this is the greatest source of revenue for Craigslist.
However, there are other categories that may or may not have a charge associated with placing an ad. These include ads from dealers and brokers selling a variety of items, and therapeutic services (which usually means massages).
Most people never notice the cost to these ads because they are not dealers or brokers, and are not offering employment. So, Craigslist seems completely free when in fact it has a very nice revenue stream.