Wednesday, April 23, 2008

eBay and Craigslist Slug it Out

They're two quite different animals really.

Ebay - individualistic, profit-driven, capitalist; Craigslist - community based, non-commercial, free to use.

Both can claim to represent the true spirit of the Internet.

It's not surprising, therefore, that there's not a lot of love between the two, expressed in the recent law suit that eBay has filed against Craigslist.

Ebay, who purchased 28% of Craigslist in 2004, is claiming that the free listing site - which operates from over 200 city sites world wide and allows users to post free ads and listings - is diluting its share by not charging for job adverts in more cities. At present, Craigslist only charges for job listings in 11 of its sites - including New York, Los Angeles, Chicago and Orange County. Analysts agree that Craigslist, which is due to make a profit of $80-100 million this year could be a multi-billion dollar business if it charged on all sites or for all listings.

Craigslsit other owners, Craig Newmark and Jim Buckmaster, have consistently declined the opportunity to place banner ads or other commercial placements on the site. In 2006 Buckmaster told Wall Street analysts that Craigslist has little interest in maximizing profit, instead preferring to help users find cars, apartments, jobs, and dates.

Their laid back business model has also prompted eBay to launch a number of rival free ad sites, paid for by sponsored advertisers. Gumtree is the most well known to British readers, while Kijiji is a similar network of sites for Internet users in Europe, North America and the Pacific Rim.

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