Wednesday, March 09, 2005

Ich bin ein Craig's List

If imitation is the sincerest form of flattery, then Craig Newmark, the founder of Craig's List must be very flattered indeed by the decision of his partner, eBay, to clone his concept in nearly 50 cities around the world.

The new eBay effort, which is called Kijiji, duplicates Craig's List in almost every respect, providing free listings for jobs, pets, housing and, of course, missed connections (Suche die schöne Blonde...). So far, Kijijis are open in Canada, China, France, Germany, Italy and Japan. Even though "kijiji" means village in Swahili, eBay hasn't set up shop in Africa.

Although eBay says its new service does not compete with Craig's List, in which it purchased a 25% stake last year, the Kijijis do overlap with Craig's existing listings in Berlin, Montreal, Paris, Rome and Tokyo. Whereas Craig's List seeks to cover a whole country with one or two listings in the largest cities, Kijiji breaks its listings into as many as 10 locations within a country. While entries on Craig's List are primarily in English, Kijiji uses the native language in every country. Thus, "Missed Connnections" becomes "Relazioni Interrotte da Lungo Tempo" or "Déménagement."

The big question is whether Kijiji will develop in the future by complementing or competing with Craig's List. Could this be the first act in a squeeze play to force Craig to sell to eBay?

Time will tell whether a major, profit-driven public corporation can comfortably co-exist with a private company closely held by an idealistic engineer who seems more motivated by public service than a bulking up his P&L.

This odd coupling was not Craig's idea. Remember, eBay acquired its stake in Craig's List when it purchased the shares of a former employee who decided to cash out. Two months ago, Craig told me eBay has been "a good partner [with a] similar moral compass," adding, "We're a community service, [and] had agreed that any equity in Craig's List had only symbolic value." He was too busy attending to customer-service issues today to discuss the latest developments.

The Kijiji launch comports with eBay's wise strategy to find new revenues to sustain its growth as the auction business inevitably flattens out. Earlier this year, eBay bought, a significant online destination for apartment seekers.

Kijiji initially will give free listings to build its audience, hijacking a significant amount of the paid classified advertising business in towns from Bordeaux to Zhengzhou. When Kijiji comes to scale, eBay likely will be far more aggressive than Craig in turning on the meter and charging for ads. This will put some balance back into the market between traditional publishers and Kijiji. But a great deal of damage will be done to print's paid ad business before then.

American publishers lost tens of millions of dollars in want-ad business because they dozed while Craig and eBay pillaged the highly profitabe business they once controlled with impunity. They may be blamed for taking too long to recognize or respond aggressively to the threat, but they may be forgiven, to a degree, for not knowing what they were looking at.

Publishers in Asia, Canada and Europe don't have that excuse. They have been duly warned.


Anonymous Anonymous said...

Ich bin ein Berliner...

The fight for classifieds is watched closely in Berlin, see some figures on my blog page that show kijiji already is ahead of craigslist in some categories...

The basic reason: kijiji Berlin is in German, craigslist Berlin remains in English language.

If we want to keep private classifieds free, we have to support Craig. He is the only I believe in not to squeeze every dollar out of the market, when the thing starts to work...

cheers, phil

3:57 AM  

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