In that kind of environment, it's pretty ludicrous to think that newspapers could survive.

As Paul Starr has explained, newspapers only flourished during the past few centuries because they functioned as intermediaries between readers and advertisers — fundamentally, they survived because they were institutions that stood between people.

MotherJones' Kevin Drum discusses Craigslist by quoting from Barron YoungSmith who continues

Now, along comes Craigslist, which sees cutting these sorts of intermediaries out of the equation as a form of public service. It considers that mission so important that it is willing to forego huge potential profits and compete against classified pages everywhere while charging virtually nothing for what it offers. In that kind of environment, it's pretty ludicrous to think that newspapers could survive.