ISO Best-Selling Model for Web Classifieds

Craigslist.org CEO Jim Buckmaster. The classified site had 9.5 million visitors in March.
Craigslist.org CEO Jim Buckmaster. The classified site had 9.5 million visitors in March. (By Paul Sakuma -- Associated Press)

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By Leslie Walker
Thursday, April 20, 2006

Craigslist, the Web bulletin board where millions of people buy and sell stuff, is facing a fresh burst of competition for classified ad listings.

Not only have Microsoft and Google launched intriguing trial marketplaces where people can sell anything for free, swarms of start-ups are plunging into Web classifieds. They take varied approaches to drumming up listings, but most offer them for free and earn money by showing targeted ads alongside, just as search engines do.

Many actually are search engines, including generalists such as Oodle ( http://www.oodle.com ) and Vast ( http://www.vast.com ) and specialists such as jobs sites Indeed ( http://www.indeed.com ) and SimplyHired ( http://www.simplyhired.com ). All four allow users to search millions of items listed on other classified sites, which they "scrape" or take in via direct data feeds to create an index. Others, such as TheAdCloud ( http://www.theadcloud.com ), are basically the result of one or two people doing a couple of weeks of programming with free software tools.

Large and small, these new directories are all exploring the Web's ability to remake local commerce. In so doing, they show how unsettled many business strategies still are online.

The new offerings in particular are tightening the squeeze on newspapers, publishers of traditional classifieds. Daily papers have been losing classified customers for years to Web players such as job board Monster and auctioneer eBay. But newspapers aren't giving up.

In recent years, many newspapers have responded by allowing people to list general merchandise for free on their Web sites. Some, including The Washington Post, are even giving free ads in their print classified sections. While The Post lets individuals run free print ads for merchandise valued under $500, the San Diego Union-Tribune goes further, offering free print ads for seven days for merchandise and cars valued under $5,000.

"It's an acknowledgment that the merchandise marketplace is now becoming a free marketplace," said Ken Doctor, lead analyst with media research firm Outsell Inc. in Burlingame, Calif. "Newspapers traditionally have been the place individuals go to buy merchandise, and the Tribune doesn't want to lose the centrality of their San Diego Web site when people look for something to buy."

Media analysts are divided on whether newspapers can hold their own against the latest wave of Internet classified activity, which involves innovation around how items are displayed online and flagged to the attention of potential buyers.

Doctor is among those who think newspapers will successfully transform into electronic news-gathering entities and remain profitable by mastering the Internet ad business. But he acknowledges it will be hard for them to go mouse-to-mouse with the Web heavyweights. "Microsoft and Google are getting it at least partially right," he said. "And they understand it is super-aggregation that consumers want online." Here's a quick guide to some recent entries into Web classifieds:

· Windows Live Expo: Microsoft entered the fray seven weeks ago with Windows Live Expo ( http://expo.live.com ), a service that lets people list anything at no charge. Sellers can make their listings public or limit access to certain social groups, such as instant-messaging buddies or anyone with an e-mail address at a particular company or school. This personalization feature sets Microsoft's offering apart. "We are trying to create this level of trust, " said Garry Wiseman, product manager of Live Expo. "So your MSN Messenger contacts [list] is one social network you can have your items listed to or from. It could be a ticket for football game and you don't want to sit next to a stranger." While listings are now free and ad-supported, Wiseman said Microsoft may wind up charging for job postings and charging extra for premium placement in Expo and other parts of Microsoft's network.

· Google Base: Launched in November, Google Base ( http://base.google.com ) is the most freewheeling of these online directories. Some say its entries are not even "classifieds" because Google invites people to list many kinds of stuff besides the traditional jobs, cars, houses and merchandise. On Google Base, users can upload audio files, school reports, recipes, restaurant menus -- almost any kind of digital information. But the free, ad-supported service also includes more-structured forms for listing jobs, apartments, houses and cars. Google also recently said it will introduce a payment system for Google Base that will allow sellers to collect payments electronically from buyers.

· Oodle: Launched in 2003, Oodle is what the industry calls a meta-search site because it indexes listings from a bunch of sites so people can simultaneously search thousands of sites at once. Oodle indexes more than 15 million ads from across the Web, including items for sale on eBay, jobs at Monster, and merchandise from newspaper and niche sites. "We do something similar to what Google does for a Web site," said Oodle chief executive Craig Donato. "We index it and produce a summary, which links directly to the listing." Donato sees classifieds becoming more like the business of Web search, funded by an ad system in which advertisers pay only when people click on their ads alongside item listings. That's how Oodle makes money, by showing ads next to listings. Soon, it also will charge for enhanced listings and premium placement, he said. Oodle also is partnering with local publishers such as The Washington Post Co., which uses Oodle's technology to power the classified section for a new Web site it is rolling out for its free Express newspaper.

· HotPads.com: District-based HotPads went live five months ago as a graphical way to browse apartment and home rentals. Its slick site displays available units as small building icons plotted on a map. Users drag a slider or click radio buttons to narrow their search by price or housing type. Landlords can list for free and soon will be able to pay for enhanced listings. Like many new classified players, HotPads is a tiny company -- just nine employees.

· LiveDeal: This locally focused site ( http://www.livedeal.com ) lets people list items free in all categories except jobs and services, which cost $9.95 per listing; and cars, which cost $20 if they generate a "qualified lead." LiveDeal officially launched in November 2004 and had 1.2 million visitors last month, according to ComScore Media Metrix.

Leslie Walker's e-mail address iswalkerl@washpost.com.


© 2006 The Washington Post Company

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