As a former marketing executive for a popular classified ad website, I was often faced with the question "how do free classified sites make money?" My response to them was always the same, it is summed up in one word; Traffic. Free products or services generate traffic and traffic equals money. The more traffic that a site can attract, the more money advertisers are willing to pay to receive some of the attention that is generated by that site. Craigslist.com for instance generates well over 100 million views per month. Even though Craigslist.com doesn't allow commercial advertisers to promote banner ads on their site, they do charge a fee for certain options in certain categories. For example, in 2011 the site made approximately $96 million in the job recruiter category, $13 million in the real estate category, and $6 million in the therapeutic massage category. This is not even calculating the money that was being made by them in the Erotic categories that they had in previous years. Some estimates were conservatively estimated at around $50 million per year before they shut it down.
Isisclassifieds.com is another great example, this website has established profit centers all through out its lay out. The company charges a small fee for use of its personals section which conveniently reduces the amount of spam received in that category. According to them, this allows the visitor to have a more quality experience. They also have an adult category that generates income for the site and I assume will add millions of dollars to their bottom line in the near future (if not already). Many classified sites like Isisclassifieds.com also charge a fee within the automotive, real estate, and job section. Basically, once the volume of visitors to a classified site is at a certain level, there is plenty of money to be made! Making money for a free classified ad website is accomplish able but definitely not easy. It can take years of marketing and promoting for these sites to generate the kind of traffic that it takes in order to turn a profit. However, once established it is very easy to create several profit centers within a classified ad website due to the multitude of categories and subcategories that exist. they have the option to just pick a popular category within the site, stamp a price on it and watch the money flow in.