Craig Newmark speaks at victim's memorial in wake of Craigslist killings 

Editor's Note: This story has been updated.

In October 2007, Katherine Olson was looking for work. Since graduating summa cum laude from St. Olaf College with a dual degree in theater and Hispanic studies, she'd mostly cobbled together part-time jobs—waitressing, teaching Spanish, coaching high school speech.

Olson was looking at nanny listings on Craigslist.org when she came across an ad from a mother who needed someone to look after her five-year-old daughter. Olson sent an email saying she was interested, and the mother, Amy, agreed to hire her for 10:30 a.m. to 5 p.m. on Thursday the 25th. Amy sent along her address in nearby Savage, about 18 miles southwest of Minneapolis.

A pretty 24-year-old with freckles and tight red curls, Olson wore a pink fleece jacket and spandex stretch pants on the day of the babysitting job. She parked her gold 2003 Hyundai Elantra outside the light teal home and walked up the paved driveway.

But when the front door opened, it wasn't Amy who answered. It was a paunchy young man with acne, armed with a Ruger .357 Magnum Blackhawk revolver.

His name was Michael Anderson, and he would soon be dubbed "The Craigslist Killer."

- - - - -

When Craig Newmark began sending out emails to his buddies during the winter of 1995, he had no intention of starting a billion-dollar business. A recent transplant to San Francisco whose counterculture streak belied a disarming shyness, Newmark simply wanted to keep fellow computer geeks abreast of events throughout the Bay Area.

Word spread quickly. During the ensuing months, droves of new members subscribed and began posting their own ads. Newmark made no attempt to moderate and let the list grow organically. Within a year, Craigslist had come to resemble more of a digital classifieds section than a mere email list. When Newmark began organizing posts by categories, the transition was complete. In 1999, he incorporated the site, making it a for-profit outfit, but nonetheless sticking with the dot-org domain name, to reflect its self-described "noncommercial nature."

The site experienced exponential growth during the mid-2000s, thanks to its intuitive, no-frills layout and great word-of-mouth. Although Newmark and Co. refuse to disclose their financials, estimates conducted by industry observers with the AIM Group suggest that Craigslist's revenues skyrocketed from $7 million to $81 million between 2003 and 2008.

"We arrived at those figures the simplest way imaginable," says Peter Zollman, AIM Group's founder. "We counted ads."

Users post more than 40 million new ads per month, according to the site's fact sheet, making it by far the world's largest source of classified advertising in any medium. The site that once catered exclusively to Newmark's Bay Area pals has established itself in 570 cities in 50 different countries and produces upward of 22 billion page views per month.

Newmark attributes his site's success to its DIY format. Unencumbered by registration fees or account requirements, commerce flourishes.

But it's precisely this anything-goes ethic that has politicians and law enforcement officials around the country gunning for Newmark's brainchild. They point to the popular Erotic Services category—intended for legal trades such as phone sex and escorts—as a cesspool of prostitution.

"Prostitution is not a victimless crime," says Connecticut Attorney General Richard Blumenthal, who has spearheaded a national campaign to pressure the site to clean up its act. "Prostitution ads, pornography, and other promotions of illicit activity can lead to the kind of horrific tragedies we've been seeing."

He's referring, of course, to the recent spate of headline-grabbing murders that have given us "Craigslist Killer" as a top Google search term. In February, a Dallas man was found guilty of capital murder for killing a 21-year-old woman who responded to his Craigslist ad for a 1995 Chevrolet Caprice. In March, New York City police discovered the body of WABC radio newsman George Weber—he'd been stabbed to death by a 16-year-old knife fetishist he'd solicited via Craigslist. Three weeks later, Boston University medical student Philip Markoff was arrested and accused of murdering a prostitute he'd solicited through Craigslist. And just last week, authorities nabbed a man in Kent, Washington, after he allegedly posted a Craigslist ad titled, "A strange desire," with the intent to solicit a woman to have sex with and then kill.

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