EBay Inc, the largest Internet marketplace, has started classifieds websites in six countries, including Germany and Japan, building on investments in local advertising sites.
The sites, operating under the name Kijiji, opened on February 28 in more than 50 cities. They allow visitors to share ideas and meet online as well as shop for items, San Jose, California-based EBay said yesterday in a statement. Other countries with Kijiji sites are Canada, China, France and Italy.
EBay, which started in 1995 as an online auction venue, last year entered the online classifieds business with purchases of Rent.com in the United States and Marktplaats.nl in the Netherlands. In August it bought a 25 per cent stake in San Francisco-based Craigslist.org, which also offers a mix of classified ads and community features.
"Classified advertising is a US$100 billion market worldwide and that's a big pie," said Peter Zollman, founder of Classified Intelligence LLC, a newsletter tracking the online classifieds market. "It's all changing and EBay is part of that change."
Kijiji will be free initially for people who list or buy items to encourage its adoption, EBay spokesman Hani Durzy said. There are no plans to charge for the services, he said.
Craigslist and other classifieds sites started as free services, offering a place where people can seek advice, have political discussions or find others with similar interests, Zollman said.
Craigslist charges for job ads in just three of the 95 cities and regions where it operates sites. It has been successfully using this formula in the San Francisco Bay area where it has taken classifieds listings from newspapers, according to a Classifieds Intelligence report.
Durzy said there are no plans to open Kijiji sites in the United States because 10-year-old Craigslist already serves the market.
Shares of EBay fell US$1.04, or 2.5 per cent, to US$40.85 at 4:30 pm New York time in NASDAQ Stock Market trading. They have risen 17 per cent in the past year.
The sites were created by EBay staff and will not compete with Craigslist, which has sites in Canada, Paris, Rome and Tokyo, Durzy said. Those are in English, while Kijiji's are in the local language, he said.
EBay operates its auction sites in each of the countries where Kijiji opened, except for Japan. In March 2002, EBay shuttered its Japanese operations after it failed to make a dent in Yahoo Japan Corp's dominance of the online auction market.
Durzy said the company does not believe the free classifieds sites will drain listings from EBay's auction businesses. People might not use auctions to find apartments, look for jobs or buy furniture, he said.
"We see it as a complementary platform," Durzy said.
Zollman disagreed. He said people may use Kijiji to sell goods they might have auctioned on EBay, or listed on MarktPlaats's sites in Canada and Germany. EBay may have had no choice in starting the venture, because other companies are setting up classified sites. He estimated EBay is spending only a few million US dollars to start the business.
"One of my mantras with all of my clients is if we don't do it, somebody else will because the opportunity is great and the costs are not all that significant," Zollman said.
(China Daily 03/10/2005 page11)
