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Back in November of Craigslist made a deal with 40 U. But as a new report reveals, these regulations actually transformed the illicit into Craigslist's fastest growing source of revenue. The report comes from the AIM Groupwhich has been tracking the finances of this very private company since As AIM's executive editor Peter Zollman notes, Craigslist's agreement with the AGs stipulated that they would charge for "erotic services", the idea being that a credit card trail would deter criminals.

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The company also agreed to donate all revenue from this sector of their business to charity. But just six months later, in MayCraigslist changed the game. The company eliminated its erotic services category and replaced it with "adult services". According to Zollman, "By changing the category from "erotic services" to "adult services" Craigslist very neatly sidestepped the agreement it had ed -- making the attorneys general look like chumps in the process -- and eliminating the requirement that they donate revenue to charity.

The company had clearly seen the light, because when Craigslist pulled this switcheroo, it also doubled the price. This little maneuver has paid off big.

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That is triple the amount from the year before, and s for more than one third of their total revenue. Richard BlumenthalAG for the state of Connecticut, wrote in a letter that he was "deeply troubled" by the fact that Craigslist was earning a ificant portion of its revenue from what he described as "posts that are clearly for illegal prostitution" and the fact that the company had reneged on its charitable agreement.

When it comes to the charitable giving, Blumenthal has a point.

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But Craigslist didn't charge for this kind of advertising before the attorney generals raised a stink. In a certain sense, Blumenthal and his colleagues have no one to blame for Craigslist's booming business in online prostitution but themselves. Ben Popper writes at the intersection of culture and technology.

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He lives at www. Ben Popper Ben Popper writes at the intersection of culture and technology.

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