Another Threat to eBay

We must live in strange times indeed, if News Corp.'s (NYSE: NWS  ) MySpace is following Wal-Mart's (NYSE: WMT  ) lead.

That's just what happened this week, as the leading social networking site outsourced its online classifieds listings to privately held Oodle, just as Wal-Mart did with earlier this year.

Sites that allow users to post free classifieds are everywhere. Craigslist leads the way, but don't discount the dot-com heavies making a push in this space, like Google's (Nasdaq: GOOG  ) Base and eBay's (Nasdaq: EBAY  ) Kijiji. But Oodle powers the listings for more than 200 sites, including Lycos and Monster Worldwide's (Nasdaq: MNST  ) Visitors can either browse site-specific listings, or conduct a broader search across all of Oodle's partners.

MySpace offered a more cookie-cutter classifieds site before handing over the keys to Oodle. Now the interface is slicker, the features are richer, and the listings are tied to profile MySpace profile pages, so that potential buyers or traders can get to know the person they're dealing with a little better.

That last point is important. A free marketplace may not offer the policing and pay protections of a premium site like eBay, but isn't it just a matter of time before eBay begins to let sellers flex a little more personality in their listings?

Even as a pay site, eBay should never be beyond borrowing an idea from a free site, if it enhances the eBay experience. Now that social-networking websites are becoming hotbeds of commerce, eBay will need to ramp up the sizzle to compete.

Isn't it just a matter of time before "thanks for the add" becomes part of the eBay lifestyle?

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Longtime Fool contributor Rick Munarriz wonders what took social networking so long to embrace local search offerings like classifieds. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy knows all.

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  • Report this Comment On July 31, 2008, at 5:15 AM, MRECB7 wrote:

    I don't think eBay is heading into social networking. Actually it appears to be quite the opposite given their every action locks the fortress down even further. Talk about suffocating - eBay needs to learn to play in a real competitive marketplace rather than tighten their monopolistic leash in what can only be hysterical fear of not knowing how to play with the big "boys" and hanging on by fingernails that are plied and bleeding in a misguided backward approach of customer retention that is causing rapid evacuation of the marketplace.

    I scrolled upo tio check the date because this statement is way out of touch with the current happenings on eBay

    "isn't it just a matter of time before eBay begins to let sellers flex a little more personality in their listings?"

    Actually that time has passed (at least whatever was allowed in regards to personalization) eBay's new vision of creativity and user pleasing atmosphere involves generic listings across eBay - in and out of store- trimmed in sponsored ads. There is nothing in a sponsored ad that demonstrates any seller on eBay's personality.

    No the new eBay will be as sterile and void of as much personal touch eBay can hoist out - the only interactive material will be clicking ads.

    I know you are the analyst and I am just me, but eBay is about to fall head over heels into oblivion. The whole of eBay Inc and all of its holdings are reliant on the marketplace- paypal uhh how does anyone think paypal has managed to acquire the massive domination it has in its market? Clealy, because of eBay's forced use of their other product paypal. As sellers leave (and they are) they take customers with them and due to the utter hatred they feel toward eBay/paypal they offer other more professional non bullying service such as Google Checkout.

    The rate of successful escapees increases in rapidity daily- as more and more users (the seller/buyer combo and the buyers who bought from them) dig their way out from under the concrete barrier the value of PayPal will begin to degrade as they begin to use other services. The appeal of PayPal to outside eBay merchant services and so on will fade over time as paypal's market share dwindles due to the massive (remeber this is eBay the massive) decline in the marketplace user base and reciprocal increase of the use of other service providers by these people who hate- let me say that again - who HATE eBay management and will likely avoid the use of PayPal at all costs.

    eBay pushed the idea that even though their is clear distress in the marketplace it doesn't matter because they have 1 paypal (not all that stable as discussed) and 2 the sponsored ads in the marketplace. Again this is just me- but it seems logical that as those who eBay was damn lucky to have had selling within their mugging venue leave, the value of the ads will erode. Really how much is someone willing to pay to have their ad show on a deserted website? If eBay continues on its vulgarly path they will be begging for link exchanges not raking in the millions by undermining the very people who provide their income by first being a selling member and 2nd providing the necessary tools (keywords - products) to make placing an ad on eBay worth anything at all.

    eBay tries to downplay the current hostile fury rumbling within the eBay marketplace, and the media appears to buy their expression of there really not being an issue, but only a fool believes the abuser has not alienated and enraged its victims.

    When investors and whoever else interested wants to evaluate the current emotional status between eBay and eBay selling members they need to view themselves as a customer who pays an awful lot of money only to have their service provider kick them in the face over and over and over again daily and decide how they would feel. Now imagine the money you are paying for that service is only to assist in the effort to derive income to feed your children, pay your mortgage, the power bill ..... everything- your whole freaking life and everything you have the quality of life you can provide your children. Now how serious is the situation within eBay and how much of a gambler are you? investing in eBay is most definitely the fast track to losing your .....

    Think about it- I would hate to hear of eBay wrecking the lives of people who bought into their lies and deception with the purchase of pieces of a house engulfed in a fury a fire.

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