When eBay launched their popular overseas classifieds service Kijiji in the United States last month, it seemed sort of an odd move for the company that owns 25% of the leader in the US classifieds space, Craigslist. On a personal level, I wasn't too impressed.
Kijiji has a hard to pronounce/spell name, an uninviting splash page, and a month later major metros like New York and San Francisco (confusingly labeled as "Bay Area") have just a handful of listings. But today, eBay is bringing another of its popular international classifieds sites to the US.
Gumtree is the most popular classifieds site in England, and is popular in other European countries and Australia, serving 500,000 new ads every month. eBay today rolled Gumtree out to three US cities, Boston, New York, and Chicago, where it plans to initially market the service to British and Australian ex-pats, according to the New York Times.
"As with other countries, our success in the US will depend on attracting great community-generated content. The ex-pat community is by its nature a transitory population, and so we expect the core site offerings of flats, jobs, cars, for sale and dating to serve the needs of this niche audience." -- Martin Tschopp, GM of Gumtree International
Visually, Gumtree has a much more "Craigslist-like" feel than Kijiji, with the appearance of a visually punched up Craigslist. The layout is more or less identical, if more colorful, and the functionality will be familiar to any Craigslist users. For that reason, and because unlike Kijiji, Gumtree is already popular in English speaking countries, there is perhaps a slightly better chance that Gumtree could gain traction in the US. The New York Times reports that eBay also has plans to bring their popular Spanish-speaking classifieds service Loquo to the US, as well as other international classifieds brands (like Marktplaats).
The strategy is an interesting one from eBay, dubbed a "swarm" by the Times. eBay spokesman, Jose Mallabo told the paper that classifieds "is a very diverse market that clearly wants more choice," and eBay is helping to fill that perceived void by migrating its overseas brands to the US. It will be hard for eBay to catch up to Craigslist in the US, however. Craigslist has an extremely large user base, brand loyalty, and strong network effect. It reminds me of other large Internet players trying futilely in the past to catch up with eBay on auctions (i.e., Amazon and Yahoo!).
What do you think? Does this strategy make sense for eBay and can it succeed? Would you consider using another service over Craigslist? Do you already? Leave a comment below.
Comments
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they are doing it because they will only ever own 25% of craigslist, the only reason they got their hands on the stock was an ex employee I believe.
It makes sense for them to do it but I think they would have been better off using classifieds.ebay.com and then used all the tools they have built into the ebay platform.
They could then take a listing and give them the choice to turn it into an auction item(well if it was sellable).
Posted by: Darren | August 14, 2007 1:33 PM
I think if eBay doesn't end up investing any marketing dollars the foray really doesn't cost them anything. Though I think their time would be better spent extending their control of the world-wide classified market which is rapidly expanding. Craigslist has certainly dropped the ball on serving the world-wide & foreign language audience and eBay would do well to fill that void and attack at craigslist's weakest point rather than attack craiglist at their strongest.
Posted by: jcb | August 14, 2007 1:46 PM
I disagree with commenter one on classifieds.ebay.com. I think that would be a big mistake on ebay's end because the current market for classifieds goes way beyond just a market for goods, you have rent, jobs, etc. That would destroy the attractive pureplay mode of eBay.
I do agree with commenter two on eBay attacking craglist on their weakest points, the international market. If you think about it, it is the logical next step.
I am little confused with why craiglist has not expanded faster. I am assuming they are trying to force ebay to sell its shares of craiglist or its a way for current management to keep control of the company without giving up to much control for expansion.
Posted by: kaz | August 14, 2007 3:02 PM
I don't think its smart that eBay launches two competitors to craigslist in the U.S. Doesn't seem like sound strategy, because they are essentially not allowing either of their sites to achieve the network effect of having a huge mass of users, which is why craigslist will always win. Ebay needs a focused attack on some weakness of CL, like what jcb said above.
Posted by: Dan | August 14, 2007 3:55 PM
Ebay isn't really a global player, they are big in the US, UK, Germany, and that's pretty much it. Same thing for Craigslist. They both still have to do lots of things right before being taken seriously in many other markets.
Classifieds and Auctions are much closer that many people think. To me this is basically a pre-empetive defensive strategy on the side of Ebay. Better to bring competition to craigslist and on the way, experiment and learn, that wait-and-see doing nothing. Besides, this is no-money to Ebay at all after all the other expensive deals they've made, skype and all the rest.
Posted by: Jesus Encinar | August 14, 2007 4:32 PM
Actually, this is an excellent strategy. Classifieds is an SEO business and this will give them more opportunities to drive traffic directly from search engines.
The software developed by the GumTree and Loquo teams will be easy to adapt for the US I believe.
Posted by: Julian Martinez | August 14, 2007 5:48 PM
I think eBay is being greedy they should stay focused on the auction Business and fix all the broken systems on eBay.eBay could Start with the feedback system, also simplify posting of listings.
Posted by: Bob | August 14, 2007 8:54 PM
eBay is fast turning into a business valued on quarter on quarter performance. It attempting to build some uncertainty into its valuation to try and maintain its multiples. This approach would also have driven the slightly electic Skype acquisition, something which I think a lot of people still struggle to understand.
At a time when its listings are down 6% on the previous quarter eBay needs an interesting story to tell the city. This is especially true of the number of start-ups entering its space, include my own Aroxo.
Posted by: Matt | August 14, 2007 11:56 PM
When eBay killed Turbo Lister (1) and forced TL2 into play they really hurt a lot of small American businesses. TL2 is a joke for a software package by anyones books. I would think that eBay would want to look after those people that have been the lions share of income for them in the Auctions market than try to start something new. Many hundreds of thousands of hours (or more likely millions) of hours creating listing to use in TL1 was suddenly wasted after eBay pulled the plug on that version of their listing software.
I for one would rather use Craig's List than pay eBay another dime to post Auctions. eBay has left a lot of animosity in attitude out there among its users towards them of late. Just knowing that eBay owns 25% of CL is a sour note to me and hope that CL finds a way to reclaim those stocks from them.
Nothing that eBay touches is clean anymore.
Dan
Mold Warehouse
Posted by: Dan | August 15, 2007 5:03 AM