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The temptation proved too much for one employee: in 2004, Phillip Knowlton sold a 25% share of Craigslist to eBay, the online auction giant, for a reported $15m. Newmark and Buckmaster are reticent about the episode, but were clearly hurt and furious. Buckmaster says there are no remaining chinks in the company’s armour: Newmark controls 75% and eBay could not make Craigslist change its habits.

Craigslist carries no corporate adverts on its site, there is no fee for registration, and most users would never know that it charges for anything. The company makes all its money by charging employers in three cities a fee for listing jobs: $75 in San Francisco, $25 in New York and Los Angeles. They even feel uncomfortable with this: Buckmaster is quick to justify the charge by saying it improves the level of jobs offered, and so improves the service Craigslist offers.

The company employs just 20 people, spends no money on ads, relying on word of mouth, and has been profitable since 1999. Craigslist doesn’t disclose how much money it makes, but industry estimates put 2005 revenues around $20m, and costs at no more than $5m. The site’s devoted users provide all the content for free.

It’s a business that has Silicon Valley venture capitalists and Wall Street bankers salivating. With its huge and loyal customer base expanding rapidly, so much more money could be made by adding adverts or by charging fees for other parts of the site. Every large media organisation has run the rule over Craigslist. Plenty have offered cash. They have all had the same reply: “No.”

A few months ago, I attended a talk Buckmaster gave at the private club Soho House in New York. The only question anyone really wanted answered was: why hadn’t they sold out?

“We do hear that a lot,” said Buckmaster.

“We make a good living and we are not interested in selling. You should be careful what you wish for. Do you really want to have to walk around with bodyguards?” There were cries of “Yes, yes,” and “I do.” There are problems with “obscene wealth”, he told the audience. But they didn’t seem to have any. Buckmaster is too cool to admit it, but he clearly got a kick out of winding up the hungry wallets.

Newmark drives a Prius, a petrol-saving hybrid car. Buckmaster has never owned a car. They both take the bus to work in the morning. “I don’t really want a Rolls-Royce or a huge, fancy house,” says Buckmaster. “Money is important until you have enough of it to be comfortable with. Beyond that, I think it’s a very mixed bag.”

“Normally I can resist anything but temptation,” says Newmark, quoting Oscar Wilde. “I don’t want to be sanctimonious, but pretty much everyone’s religious background says that our moral values are more important than our material values. I guess I believe that.”

The bursting of the dotcom bubble seems to inform the duo’s moral stance as much as Leonard Cohen and the Good Book. They had front-row seats for the first internet gold rush in the run-up to the new millennium. As twenty-something entrepreneurs made paper fortunes, Craigslist became the community bulletin board for San Francisco and the Bay Area. Venture capitalists tried unsuccessfully to become investors. When the dotcom bubble burst, Craigslist was left standing – a largely free, low-maintenance community site used by, among others, former dotcom workers looking for jobs. Six years on, internet companies are hot again. Big media companies – including The Sunday Times’ parent company, News Corp – are paying big prices for online media firms. And the second coming of the internet has shaken mainstream media just as hard as the first wave.

This time around, it’s not the dotcom workers looking for jobs. The traditional media – TV, newspapers, magazines – are losing advertising to online rivals. In the US, newspapers earn over a third of their revenues from classified ads. Nationwide classified revenues continue to grow, albeit slowly, but in cities where Craigslist is well established, the website is burning up the market. Classified Intelligence Report, an industry newsletter, found that in San Francisco the main newspapers lost over $50m in classified revenues in 2004 because of the Craigslist effect.

In March, Knight Ridder, America’s second largest newspaper chain, was sold to McClatchy, a newspaper chain one-third of its size, for $6.5 billion after shareholders demanded action over its falling share price. Gary Pruitt, McClatchy’s chief executive, wrote in The Wall Street Journal that investors’ concerns about the industry had allowed his company to buy Knight Ridder for “a price that would have seemed an unimaginable bargain only a few years ago”.