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Old 10-02-2008
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BooMer BooMer is offline
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Default EBAY Classified vs Craiglist

I read about this briefly on wikipedia about craiglist and now I'm reading about it in TheWallStreetJournal

It seems Ebay is afraid that Craiglist is going to take over. I hope Craiglist wins in this lawsuit. I just sold my first item on Craiglist within 1 day of putting it up and no fees. Yeah baby.


Here is the article:
Internet auctioneer eBay Inc. is looking to expand its global classified-ad business by taking advantage of an economic slowdown to buy promising private companies with low valuations.

Jacob Aqraou, general manager of eBay's global classified business, said he expects the company will take over a "fair" number of companies in the next six months or so.

In an interview, Mr. Aqraou said lackluster economic growth and the deepening credit crunch have depressed prices for private companies to such a degree that it now makes more sense to buy established classifieds properties than build new services from scratch.

He said eBay's strategy was to target classified-ad sites that have leading positions in geographies and industry segments in which eBay doesn't currently compete.

EBay, based in San Jose, Calif., in 2004 and 2005 spent hundreds of millions of dollars to buy about 25% of Craigslist, North America's top online classifieds site, as well Germany's Mobile.de, Marktplaats of the Netherlands and Spain's Loquo. It also launched Kijiji, a classifieds site available in more than 20 countries.

"They have learned that classifieds can be a hell of a business," said Peter M. Zollman, a founding principal at Classified Intelligence LLC, a consultancy that has estimated the global offline and online classifieds market at $100 billion.

EBay's focus on its classifieds business is the auctioneer's latest attempt to regain momentum it has lost as buyers and sellers gravitate to fixed-price sites, such as Amazon.com Inc. and other classified-ad sites. The company's sluggish business prospects have helped drive eBay shares down more than 30% so far this year.

EBay's classifieds business, which gets revenue from listing fees and advertising, is estimated to generate between 5% and 10% of the company's $7.7 billion in annual revenue. Mr. Aqraou declined to comment on the estimate, but he noted that the classifieds unit is eBay's fastest-growing business.

Mr. Aqraou pointed to Eastern Europe and Scandinavia as regional priorities, adding that the first in a series of acquisitions could be announced within the next several weeks.

Mr. Aqraou said eBay was also looking at classifieds sites that serve professionals, such as car dealers and real-estate agents, as well as individual consumers. He said these sites typically feature analytical and tracking tools that can be integrated with the dealers' or agencies' own IT systems.

EBay recently announced auction-fee changes that were expected to accelerate the shift toward its fixed-price business. The company also said it was stepping up efforts to crack down on fraudulent sales and will invest in new search technology.

Mr. Aqraou said while eBay's regional classifieds properties are localized to reflect the culture and language of their target audiences, eBay's classifieds business becomes more efficient as it increases in scale because the sites operate on common back-end infrastructure, including search and filtering technologies.

EBay says about 82 million people visit its global classifieds sites monthly, generating 4.5 billion page views. Craigslist claims more than 40 million monthly visitors to its sites.

The two companies are in a legal battle, with eBay alleging Craigslist's decision to reorganize its stock structure diluted eBay's holding in the company. Craiglist has argued eBay used its position on Craigslist's board to obtain inside information so it could launch Kijiji and undermine Craigslist's business.
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