Craigslist hotly pursued, still miles ahead - Corporate News

New York: Microsoft Corp. tried. Google Inc. tried. Now it's eBay Inc.'s turn to see if it can dethrone the Web's most spectacularly successful underdog, Craigslist Inc.

EBay's Kijiji Inc. unit, a free classifieds service, covers more than 25 countries online, including France, Russia and China, but not always under the Kijiji name. It was introduced in the US in late June and has already achieved modest success. Its chief executive, Jacob Agraou, said he would be far more aggressive in 2008 in the hope of denting Craigslist's lead. “Next year we'll fully be up to the level of resources we should be putting against this,” Agraou said.

Kijiji has done fairly well, climbing to second among all classifieds sites in the US, with 1.8 million visitors in November, according to Nielsen Online, a research arm of the Nielsen Co. That is a far cry from the 20 million US visitors to Craigslist during the month. Since its debut in early 2005, Kijiji has already overtaken Craigslist in many foreign markets, including Canada. In the nine foreign markets that Nielsen Online measures, Kijiji led all other classified sites in November, attracting about 9 million visitors, compared with about 400,000 for Craigslist.

And although Agraou said most of Kijiji's visitors have come from word-of-mouth referrals, it has spent an undisclosed sum on ads. Kijiji also leaned on the mother ship for marketing help, sending between 15 million and 20 million emails to eBay users.

Unlike Craigslist, a 25-person company with a public service mission, Kijiji's top priority is making money. The site will this year begin offering marketers the chance to post ads throughout the site. As of 2007’s third quarter, revenue from eBay's classifieds category jumped by more than 100% from the same period in 2006, making it one of eBay's fastest growing units.

As Kijiji and Craigslist expand, newspapers and other paid classified companies are watching closely. Atwood said Kijiji's approach was likely to be the model of the future, where businesses see classified listings as just another category of free editorial content that they must surround with paid advertising.

Small, local advertisers are quickly joining the Web. Borrell Associates estimates that local advertisers spent about $7.5 billion (Rs29,700 crore) in the US in 2007 online—a 31% jump from 2006.

Craigslist continues to eschew that approach. The site's chief executive, Jim Buckmaster, said Craigslist only considers those features that users request, and advertising does not qualify. It charges nominal fees for apartment listings from brokers in certain markets, it says, to keep brokers from flooding the site with repetitive ads.

Craigslist added nearly 7 million users over the past year. That should be enough to give Kijiji and other competitors pause, according to Greg Sterling, of Sterling Marketplace Intelligence, an advertising consultancy. "There are other sites, such as Google Base, with nicer features for users, but they haven't dented Craigslist."