Will the online auctioneer’s Kijiji.com be able to lure advertisers away from the popular local classified-ad site?
Craigslist has some new competition in the online classifieds markets and it appears to be based in its own corporate boardroom.
eBay, which owns a quarter of Craigslist, has become so enamored with online classifieds that it is about to go head-to-head against Craigslist with the launch of its international classified-ad site Kijiji in 220 U.S. cities.
But battling Craigslist in its own backyard would not be easy. Craigslist is by far the dominant player and Kijiji offers features not found on its relatively simply designed competitor.
In addition to its investment in Craigslist, eBay has acquired a number of classified marketplace sites over the years.
With nary a press release or even an announcement on its Web site, eBay has started offering its Kijiji free online classified ad service to people in the United States.
The rollout of Kijiji in the U.S. puts it in direct competition with free online classified ad pioneer — and leader – Craigslist. The fact that eBay owns a 25 percent interest in the venerable Craigslist has observers wondering about eBay’s long-term plans for Kijiji.
Kijiji — which means “village” in Swahili — was launched two years ago after acquiring Gumtree’s European classifieds network spanning in Canada, France, Germany, Italy, China, Japan and Taiwan, and was made available last year in Austria, Switzerland and India.
The United States, Belgium and Turkey are joining the Kijiji fold this year.
In addition to its investment in Craigslist, eBay has acquired a number of classified marketplace sites over the years including Kijiji, Gumtree.com, LoQUo.com, Intoko, Marktplaats.nl, and mobile.de. Intoko has since been merged with Kijiji.
eBay also owns another Craigslist competitor, Rent.com, which it acquired in February, 2005.
The 12 year-old San Francisco-based Craigslist enjoyed a cult following and became one of the most popular sites on the internet with everything from job postings to angry letters.
A study conducted last year by research firm comScore found that Craigslist dominates the web classified industry. The site is currently the 47th most popular on the internet, according to the Alexa Top 500 rankings.
In May 2007, Craigslist had 20.6 million U.S.-based unique visitors, according to Internet metrics firm comScore, enough to place first among the 25 classified sites most visited by U.S. users and a 75% increase over May, 2006.
The way it describes itself makes Kijiji sound quite familiar to Craigslist. “Kijiji is a group of free, local, community-based classifieds Web sites” that “offers a convenient, fun and easy way for people in the same city to meet, trade, share ideas and help each other out in areas such as goods, cars, services, housing, jobs and personals.”
The site claims to have more than 17 million users worldwide — in more than 300 cities in 20 markets — which, if accurate, would be about two million more than Craigslist purports to have.
Currently, Kijiji has far fewer listings than Craigslist. Kijiji’s “computers software” category, for example, shows just 24 Bay Area listings posted since July 3. Craigslist’s Bay Area “computers & tech” category includes over 700 posts just for July 5.
Kijiji was developed by a small group of eBay employees and launched under the oversight of Alex Kazim, then senior VP of new ventures at eBay. Kazim is currently the president of eBay’s Skype IP telephony service.
The New York Times quoted Hani Durzy, eBay’s spokesperson, as conceding Kijiji is going to be eBay’s classified advertising move in the United States and will be competition to Craigslist, as well as various other platforms.
“One of most interesting aspects of this whole thing is the conflict of interest eBay seems to have,” Sterling Market Intelligence principal, Greg Sterling said. “You can differentiate them (Kijiji and eBay) but really, how can you have an eBay director sit on the board of a site eBay is now competing with in a very, very direct way? You would not have a director on both the boards of Coke and Pepsi, and I think that is the situation that exists here.”
Craigslist appears not to care much about potential competition from eBay. “We assume that eBay will continue to be a steadfast member of our board, and conduct themselves honorably and appropriately,” spokesperson Susan MacTavish said in an e-mailed statement.
An eBay spokesperson acknowledged that Kijiji competes with Craigslist and said the company is retaining its board seat and equity position in Craigslist at present.
In addition to its flagship auction site, eBay offers comparison shopping through Shopping.com, payments through PayPal, ticket sales through StubHub, and Web store development tools through ProStores.
Even though, Sterling remains skeptical that Kijiji will be able to overtake Craigslist in the classified market. “Google Base did not kill Craigslist or eBay, and Kijiji will not kill Craigslist,” he declared.