Craigslist will remove its Erotic Services category "in seven days," replacing it with a category titled Adult Services for which entries will be individually reviewed before being posted to the popular online classifieds Website.
Postings in the new category will cost $10, with the option to repost for $5.
Craigslist cited a number of sources as having influenced the decision, including users of the site, law enforcement officers, businesses, legal experts and attorneys general. Critics had accused the Erotic Services category of being a thinly veiled front for prostitution.
"We are optimistic that the new balance struck today will be an acceptable compromise from the perspective of these constituencies, and for the diverse U.S. communities that value and rely upon Craigslist," the company said in a statement.
"Contrary to some of the sensationalistic journalism we've seen these past few weeks, the record is clear that use of Craigslist classifieds is associated with far lower rates of violent crime than print classifieds, let alone rates of violent crime pertaining to American society as a whole," the statement continued.
Craigslist has found itself under occasional pressure from law enforcement and state attorneys general following incidents in which answering ads ended in violence. Despite some calls to shut the site down, other groups such as the Electronic Frontier Foundation have said they believe that Craigslist is legally protected, particularly by Section 230 of federal law, stating: "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."
In 2004, eBay purchased a 25 percent equity stake in Craigslist. In the midst of the recession, Craigslist has become a key site for job hunters and other solace seekers. An Apple iPhone App called Craigster has brought an easier-to-use version of the site to mobile users.