July 3, 2007 7:50 PM PDT

Craigslist grapples with competitor on board

Craigslist, the pioneering online classified Web site, is facing a large new competitor, one that has accumulated insider knowledge of Craigslist's business.

On Friday, eBay's online classified service, Kijiji, made its U.S. debut. For the past two years, Kijiji has operated overseas but is now available in about 220 U.S. cities, said eBay spokesman Hani Durzy.

The auctioneer is up against an Internet icon in the privately held Craigslist. The 21-employee company operates on a shoestring budget, is well-entrenched in every major U.S. city and founder Craig Newmark is beloved by users for his reluctance to commercialize the site.

But eBay enjoys an unusual advantage. For three years, executives at eBay have been allowed to peer deep into Craigslist's operations. Since 2004, the year eBay bought a 25 percent stake in the San Francisco-based Craigslist from a former employee, the auction site has held a seat on the company's board of directors.

Newmark, Craigslist CEO Jim Buckmaster and eBay founder Pierre Omidyar once made up the three-person board. Another eBay representative has replaced Omidyar, according to Durzy.

"We've learned a lot from Craigslist," Durzy said. "We think this market has room for several classified services."

eBay's dual role with regard to Craigslist has already raised some eyebrows.

"There is definitely a conflict of interest," said Greg Sterling, principal of consultancy at Sterling Market Intelligence.

Buckmaster said in an e-mail to CNET News.com that because of Craigslist's public service mission and disinterest in things like "market share and revenue maximization," the company doesn't really care who hops into the classified business.

"I'm not a legal expert," Buckmaster wrote, "but I think it's safe to assume (eBay) will continue to conduct themselves appropriately with respect to their responsibilities to Craigslist."

Sterling said he doubted that eBay's knowledge of Craigslist's inner workings would be of much help. He predicted that eBay would need plenty of time before it could threaten Craigslist's position as the sector's leader.

"Craigslist has a trusted brand in the classified segment," Sterling said. "And Kijiji, well, they have that name. It's not very intuitive. It's very awkward and they have to create a brand around it. Maybe they can piggyback on the eBay brand, but it's not a guaranteed success just because eBay owns it."

Durzy said that eBay brings plenty of its own expertise in matching buyers and sellers over the Web and has the kind of deep pockets that can help it patiently build a business.

"We think there is an opportunity to create a better user experience," Durzy said. "The process of buying on a classified site can be made easier."

Kijiji will begin as a free service, but that could change, Durzy said. The company could one day generate revenue from display advertising or by offering premium services.

Asked about what eBay may have planned for its Craigslist stake, Durzy replied: "We have a minority ownership in the company and that's not going away. We're happy with that investment, both financially and strategically."

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18 comments

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eBay - Don't waste your money
Craigslist rocks!!!!

I use it all the time. Its simple, more resiliant to fraud than eBay, and the best part, IT WORKS!

I use it all the time and once sold an item 30 minutes after I posted it. Will I trade that for eBay's heavy process and annoying ads, yeah right.

No Thanks! Craig, get them out of your house!
Posted by NewsReader_ (280 comments )
Reply Link Flag
No eBay
Pro gun control = I don't spend money there if I can avoid it. PayPal is also pro tyranny.
Posted by Phillep_H (497 comments )
Link Flag
craiglist is already a trash site
It has been taken over by spam and other dubious perveyors of various c...p that it's almost worthless anyway. It's much like the financial message boards on Yahoo.
Posted by oxtail01 (308 comments )
Reply Link Flag
Definitely overrun
Although I've used craigslist to occasional success (mostly when listing items I'm giving away, otherwise people don't seem to want to pay even $5.00 for something--or they say they want it and never show up), I have to agree that it has become overwhelmed by too many fake or spam ads. (though I still love to read the "Best of")I think this could be remedied by at least requiring people to have an account in order to place an ad, or charging a tiny fee. But who knows.

A friend of mine actually started a site inspired by what craigs has become...they are trying something new--they actually pay people to list their ads (only 25 cents per listing, but hey it all ads up!). They are also going to be doing auctions soon with the same pay per listing concept(inspired by ebays insane fees).

Anyway if anyone wants to check it out and give them some feedback, I'm sure they'd appreciate it. It's www.listasaurus.com. (And like ebay, I agree there's room out there for many different avenues to sell or giveaway your excess.)
Posted by ziggyzuu (2 comments )
Link Flag
True
I agree that Craigslist is overburdened with rubbish. I'm surprised
when Internet companies allow such junk to reduce the value of
their products. Another example is Skype, whose people search
function is now virtually worthless due to the ubiquity of sex
services in search results. In Skype's case they could prevent this by
simply assigning an employee to delete the junk, but they don't
bother. Craigslist at least tries, if not hard enough.
Posted by nicmart (1829 comments )
Link Flag
I Disagree (as far as Portland Oregon area anyway)
At least in my slice of it, I've found it to be quite well-maintained by the folks who use it, and scams, spam, etc. usually get flagged and ditched in very short order.

When I first moved up here early this year, I had left a ton of furniture behind (the job offer had come less than two weeks after I posted my resume on Monster, and I had to get up there in two weeks). Craigslist postings had found me an apartment full of used furniture for damned cheap; usually free.

I've managed to use it for all the stuff a guy needs when moving from apartment to house (tools, more furniture, etc), and managed to find everything there for very little cost (usually dirt-cheap or free).

Dunno about your region, and yes regions are very likely different (Salt Lake City's pages suck IMHO), but between Portland and Seattle's, I've found that Craigslist works very, very well up here in the Pacific Northwest.

/P
Posted by Penguinisto (5042 comments )
Link Flag
Disagree
I have to disagree. I use craigslist all the time in Seattle and the Bay Area and it works well.
Posted by mweingar (55 comments )
Link Flag
Craiglist Trash site?
I don't think so. Some attempt to abuse it, but they often fail.
Posted by UFN (1 comment )
Link Flag
Craigslist is the Best
I will never buy or sold anything or Ebay but Craigslist
Posted by Pauldsu (83 comments )
Reply Link Flag
Like Google video vs YouTube
This battle is already over before it's begun. Craigslist has already won the war. In the realm of online classifieds, volume is the key - volume of users looking, volume of posters posting. Craigslist has this locked up, and there's no reason for anyone to ever move to Kijiji. The users just aren't there, and they are on Craigslist.

Game over.
Posted by brianbot5000 (75 comments )
Reply Link Flag
Another eBay's crap Slando
shamelessly steals content of its competitors in eastern europe.
Posted by michalts (1 comment )
Reply Link Flag
Where's the grappling?
It doesn't sound like there's much grappling going on at Craigslist. As a matter of fact, it seems that Craig Newmark and company are not all that concerned about eBay's entry into the classified marketplace. Why are technology business stories all written as if they are athletic contests with winners and losers. Us vs. them, new vs. old, iPod vs MP3 player, etc. etc. Is every male journalist a wantabe sports reporter? There are enough users of technology, especially in internet-based applications, to support multiple solutions to the same need without causing a life and death struggle every time there's a new entry in a field.
Posted by zanely (96 comments )
Reply Link Flag
Kijiji? Not a great name to type.
That is a horrible net name. It's also hard on the eyes to see.

I don't think it will phase craigslist. That would be like Yahoo Auctions affects Ebay.
Posted by mgeoffrey (2 comments )
Reply Link Flag
Heheh
Is that "Kijijiji" or "Kijijijijiji"? <P> (GAH, MY EYES!)
Posted by Phillep_H (497 comments )
Link Flag
Maybe that's the point
So when this thing crashes and burns, it doesn't reflect on the eBay brand.
Posted by solrosenberg (124 comments )
Link Flag
Well this makes for an interesting choice...
Do you go with the eBay offering and know that 95% of the time like with their auctions you get screwed. Or do you go with Craigslist and risk getting screwed 10% of the time. Hmmm... eBay or Craigslist? I think I will have to go with Craigslist. I like their attitude and besides the one time I did get screwed it was my own fault, not so with eBay. Also, Craigslist doesn't charge you for getting your rear rammed.

Robert
Posted by Heebee Jeebies (632 comments )
Reply Link Flag
Killeen Texas Computer Nerds - Kijiji FREE
Don't be fooled. Every time I see that dirty 4 letter word FREE, I cringe. Nothing in life is free. If this service is initially launched as free, I am willing that in under 18 months it will be cluttered with advertisement or it will mysteriously convert to pay per view.
Posted by thetopnerd (17 comments )
Reply Link Flag
Adlandpro classifieds is a good one http://adlandpro.ws
Posted by classifieds (61 comments )
Reply Link Flag
 

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