Austin-based startup BidModo is launching a public beta today that hopes to simplify this process for small businesses and provide them with better information to make better decisions, instead of simply relying on word of mouth referrals.

Instead of just putting an ad out there and getting back simple replies, the responses come from registered companies and are organized on a dashboard. Each company has an on-site profile, containing contact information, a company history, provided services, previous clients, certificates and licenses, and a list of references. Each company also has a rating card, which shows how that business rates with its clients on ten different characteristics, from bid timeliness to industry knowledge.

If you've ever used something like Craigslist, then you realize how hard, or even impossible, getting all of this information would be. You would practically need to hire a private investigator.

For end users - those posting the job - the service is entirely free and provides the user with information about bidders, vendor ratings and a dashboard comparing bids. Vendors only pay for selected leads. A vendor dashboard provides information on ROI, monthly sales data, ratings feedback and industry stats. And part of BidModo's focus is on local business, so service requests only come from the region, which is something we think people, wherever they are, will stand behind.

"Prior to BidModo, I ran a video production company," said founder Toby Schwartz in a press release. "I would regularly hear of companies in town turning to New York or San Francisco to hire for their video needs. And I can't tell you how many times I'd meet people in Austin who would comment that they wished they knew I was here."

Currently, BidiModo is live nationally, with over 80 cities and connections in more than 100 different categories.

Connecticut's Attorney General, Richard Blumenthal, called Craigslist "a blatant Internet brothel". And given all the negative publicity around the service (including the story of the "Craigslist killer" that kept tabloids and local TV news shows stocked with material for days in April), the company clearly decided that it was time to revamp the red light section of its service.

It is important to note, though, that it doesn't seem like Craigslist could actually be held accountable for the ads placed in its site, instead, it rather seems like the company simply gave in to the mounting pressure.

There is, of course, no denying that the French teachers that advertise in Craigslist's "Erotic Services" (ES) section are probably not trained linguists. By 11am this morning, the ES section for Portland, OR (link is SFW, but everything after that is not) already featured over 300 ads, very few of which we could even post a screenshot of here on RWW.

Reborn as "Adult Services" - With Adult Supervision

Craiglist, however, is not shutting the ES section down completely. Instead, it will be reborn as a new "adult services" section, where all posts will be reviewed before they are published on the site (to ensure that they are from "legal adult service providers"). New ads will cost $10, and can be reposted for $5.

Of course, we can't help but think that this will only drive the erotic services providers to other outlets (or, even worse, back on the street). We also can't help but wonder what euphemisms advertisers in the new "adult services" section will come up with to still sell their wares on Craigslist. Or, as our own Jolie O'Dell pointed out in our RWW backchannel, maybe this will turn out to be a boon for the newspaper industry and alternative weekly newspapers, who might just pick up some extra classified ads in the near future.

CC-licensed images used courtesy of Flickr users MoToMo and Benimoto.

John Donahoe made the very reasonable point that online e-commerce will look like offline commerce: fragmented. Consumers will buy from eBay, Amazon, Walmart.com, Zappos, whatever gets their attention and has the right product at the right price. That rings of common sense.

To illustrate this fragmentation, he told us that the mighty Walmart has only 4% of the market.

For a more extensive discussion of the problems facing eBay's core service, read this very well-reasoned (but long) post on SeekingAlpha.

When queried on these issues, Donahoe simply indicated that the problems did not originate on his watch, that he was aware of them, and that they were complex to solve. That does not seem enough. The bits of insight above may be great, but eBay needs to fix its core service to regain its stature as a leader and give investors a good return. You don't transform a company without fixing the core, and investors clearly feel that eBay needs transforming; that is the message behind a stock price that in the last 12 months trails the NASDAQ and peers like Google and Amazon. eBay is actually in the rather miserable club with Yahoo, as perceived by investors.

PayPal: Jewel in the Crown?

Donahoe contrasted the fragmented e-commerce business with the highly consolidated payments business. Clearly, the latter has greater appeal. One can see why. The payments business is global and dominated by a few players: Visa, MasterCard, and Amex. As the low-cost player best suited to the web, PayPal has enormous potential.

I'm pretty sure I even heard Donahoe say, "PayPal should be bigger than eBay." As he spoke about the global payments system, one could see why.

He described the national banking regulatory challenges, a major barrier to entry. Taking money online is the easy bit, he said. Moving that money in and out of the traditional banking system is hard, because the banking system has to adhere to a maze of local regulations. Donahoe told us that eBay works on penetrating something like 5 to 15 new countries each year. Some, like Japan, remain a challenge.

This is clearly a huge opportunity, but these local regulations are a big barrier to entry. Anyone who has done a lot of international business can attest to how archaic some of the processes are. Wiring money is bad enough, but the processes around letters of credit seem positively arcane, almost 19th-century.

Oh, and a $500 million High-Growth Skype Business

Skype is the eBay business I am most familiar with as a user. We use it all the time here at ReadWriteWeb. It is a core tool for running a small business in which colleagues, clients, audience, partners, and everybody else in the community are all over the world. For entirely selfish reasons, I evangelize Skype to everybody. Now, I want Skype on my cell phone to cut my mobile bills; it is definitely ready for prime-time.

And yes, Skype is a real business. Donahoe told us that Skype generated $500 million in revenue last year, with "high-teen margins" and growth rates of 30% to 40%. Saying "That's not a bad business" got a wry laugh from the audience (all of whom would consider it a totally amazing business). In any other market, that would be a red-hot IPO.

Skype is perfectly positioned for a long recession, too. That already shows in the numbers. In the last quarter, Donahoe told us that Skype-to-Skype grew 73% and Skype Out grew 63%. I can personally attest to seeing many smart people, who had not used Skype previously, see it and say, "OMG, it's amazing."

$500 million was only 6% of eBay's total $8.5 billion revenue in 2008. But with Skype growing at 30% to 40% and eBay's core service hurt by a slow-down in consumer spending, this percentage could change significantly in 2009.

How much could eBay get for Skype, a business that already has scale, good revenue growth, decent margins, and a model and technology that are disrupting the massive telecom market globally? It is not entirely outrageous to think that Skype could become the biggest telecom company in the world at some not-too-distant point in the future. At some point, the IPO market will come back. All of eBay (including PayPal and Skype) is currently valued by the market at $15 billion. How much would the market value of Skype as an independent entity be? More than 6% of $15 billion? I think so.

eBay spinning off Skype was one of the three web-tech market events that I wished for (not predicted) for 2009. It looks possible. Methinks it is simply a matter of timing and market conditions.

The VC Portfolio

As well as being a collection of great but unrelated businesses, a kind of online conglomerate, eBay also looks like a VC with a strange but interesting mix of minority stakes. The most interesting and oft-discussed is its 28% stake in Craigslist. It is clearly not a happy relationship. But that 28% must be worth something.

The Economic Question

The underlying question for everybody at the Accel Symposium was, "What about the effect of the economy on your business?" Donahoe pointed out that they saw the downturn in their PayPal and eBay lines as early as May. Signals from millions of small buyers and sellers are far more reliable than any GDP numbers. So they were able to take corrective action early.

eBay's biggest action was to offer coupons to buyers, to help sellers. As he pointed out, small sellers have weak balance sheets, so a downturn can make them vanish quickly. eBay moved quickly to support its sellers.

Asked if eBay was recession-proof, Donahoe pointed to Skype as being perfectly positioned, but he noted that if consumer spending slows, then even e-commerce is affected. And e-commerce is down.

Time to Fix E-Commerce While it's Down

eBay needs to have a compelling core proposition for e-commerce that unites auction, fixed price, and classified ads. Donahoe pointed out that search is the obvious unifier. But it is not clear how eBay can use this to its advantage.

E-commerce still makes up only 7% of retail. Given the amount of time we spend online and the obvious opportunities, this could grow to 15% to 20%. A big prize awaits here when the economy turns around. eBay has the financial strength to build through the downturn.

Donahoe also painted a vision of mobile e-commerce. It is one that others have painted before: you go into a real-world retail store; see an item you like; scan the barcode to get the price; find a better price online; then decide whether to buy it in the store or online, depending on whether you prefer convenience or lower price.

As he pointed out, this could encounter a bit of resistance. I can envision videos popping up on YouTube of irate shopkeepers throwing out barcode-swiping bargain hunters! Physical retailers will have to adapt, but online folks such as eBay will have to be sensitive to their needs. This will be interesting to watch.