In case you missed it, Kijiji is 'Swahili' for village. As it turns out, it is also 'eBay' for cloning Craigslist. Only month's after acquiring a stake in the infamous online classifieds site, eBay has launched an international network of local community trading boards which replace their auction gavel with free listings.
Although at first blush, Kijiji.com seems competitive to the core eBay business, it is actually consistent with the company's recent acquisition focus in the online classifieds space. In addition to their 25% stake in Craigslist, eBay has also bought Dutch classified site Marktplaats.nl, U.S. apartment and rental housing site Rent.com, and Mobile.de, an online site for automobile ads in Germany.
Aside from the imperative of matching annual growth rates, eBay's recent obsession with local classifieds has a lot to do with their paranoia at missing part of the online community equation. When it comes to offering a global trading platform, eBay has no equal. However, there are some kinds of transactions, such as trades and services or large furniture items, where the proximity between buyers and sellers makes a big difference. Indeed, the organic growth of Craigslist, which facilitates the nomadic workforce of the US finding their apartment, a job, a car, and a date (in no particular order) - is based on the strength of its local focus, rather than its transactional efficiency.
Strangely enough, transactions or the ability to actually 'close the loop' on a advertisement may be the magic ingredient which makes local classified sites as profitable as auction sites. Given that well over a third of all eBay items are sold at a fixed price rather than at auction, the real eBay point of difference is that it can actually demonstrate a transaction has taken place. That winning charm is now spreading to its newly acquired businesses. eBay's property site, Rent.com, offers a $100 reward to anyone who signs a lease and acknowledges the website as the referring source. It can afford to do that, because agents pay Rent.com $375 for a confirmed lead.
eBay's official line on Kijiji is that it will not have any major impact on its revenues - and they may be right. Look closely and you can see the damage control in action. The 50 cities chosen for launch are all non English, and do not overlap with Craigslist's international network. If anything, the launch strategy may be a softening up tactic against local newspaper networks before a full scale eBay assault.
And as you can imagine, with eBay now hosting an estimated 24% of all US e-commerce activity - there is little good news in all this for newspapers, which have been largely slow to counter the risk to their existing classified revenues. US based Tribe.net has had some success raising capital from from newspaper companies such as the Washington Post Co. and Knight Ridder Inc. to turn its regional social networking sites into local resource and classified-ad services. However so far, the newspaper interest in Tribe.net seems to be more driven from opportunistic investment rather than a co-ordinated multiplatform strategy.
Kijiji or no Kijiji, there is no doubt that the immediate imperative for the giants of print is to leverage their existing audiences into online listing volumes, before new competitors overbuild their networks with faster and more efficient marketplaces. Losing consumer advertising markets would not only hurt revenues, but may ultimately also undermine circulation. And that spells trouble in any language.
