Please ensure Javascript is enabled for purposes of website accessibility

Yoo-Hoo, Yahoo! Check Out This Book

By Rick Munarriz – Updated Nov 15, 2016 at 12:16AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Free online classifieds may entice Yahoo! to look again at the growth value of Facebook.

So you're graduating from college this month and you don't know what to do with that collection of empty beer bottles, the Chevy El Camino on blocks, and your exploding-burrito-seasoned microwave oven. Maybe Facebook can help. The popular social networking site that got its start as a closed network for college students to share campus snapshots is launching free online classifieds.

It's about time!

It's just a logical evolutionary step. Why let users run off to Craigslist or pay for eBay (NASDAQ:EBAY) auction listings whenever they have something to sell? With its college-specific roots, the site is a natural to assist with reselling textbooks, finding roommates, and landing a last-minute date for the sorority formal.

The site will be free, though that doesn't mean that it won't be lucrative for Facebook. Advertisers may have dismissed Facebook as a poorly converting social networking site that was only good for brand-building campaigns. But now they will be wooed by the monetizing possibilities of an active community with transactional expectations.

This is about more than the obvious, though. This is the bartender making a last call out to Yahoo! (NASDAQ:YHOO). It has been widely reported that Yahoo! and Facebook were once in heated buyout talks.

Facebook making a move to launch online classifieds hits Yahoo! in several different places.

  • Free employment classifieds will eat away at Yahoo!'s HotJobs.
  • Dating listings will nibble at the ear -- seductively, of course -- of the popular Yahoo! Personals online dating service.
  • Yahoo! has also been working with print newspapers to beef up their online classifieds.

Yahoo! won't feel much of a sting in its premium services. It's a big world out there. No, the real loss here would be the opportunity cost of Yahoo! not being the site to help Facebook monetize its online classifieds. Yahoo! could certainly use the virtual real estate, as Google (NASDAQ:GOOG) keeps distancing itself by growing faster than Yahoo!.

Letting Facebook cash in on the potential internally -- or handing the keys to partners like Monster (NASDAQ:MNST) for job listings or IAC's (NASDAQ:IACI) Chemistry.com for dating -- may be just enough to push Yahoo! back to the bargaining table.

So don't focus on what Facebook is selling with the launch of online classifieds on its site. It's really a matter of how much Yahoo! is willing to pay to buy it.

Yahoo! and eBay are Stock Advisor recommendations. A 30-day trial subscription to the market-thumping stock research service is as free as a Facebook classified ad.  

Longtime Fool contributor Rick Munarriz thought that Facebook was being greedy in wanting too much out of Yahoo!, but feels that Facebook has Yahoo! where it wants it this time. 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 has a disclosure policy.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
eBay Inc. Stock Quote
eBay Inc.
EBAY
$38.19 (-0.29%) $0.11
Match Group, Inc. Stock Quote
Match Group, Inc.
IAC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.