My Foolish colleague Rick Munarriz discussed eBay's launch of Kijiji last week, and I agree with him that this move could bode well for eBay. As he said, it doesn't hurt for eBay to go for it, since this sort of service is migrating online anyway and classified advertising through print media is yesterday's news.
Way back in 2004, when eBay first snapped up the Craigslist stake from a departing employee, Fool contributor Tim Goh recognized that eBay could learn a lot from Craigslist. He also pointed out that eBay would find some elements harder to replicate. That's where my questions about Kijiji come in.
Many analysts being quoted in the news media seem to be responding bullishly to eBay's move. Since Craigslist is working the online-classified market with hardly a profit motive in sight, the analysts say, just think of what eBay, which is focused on profit, can do! But to me, that's ignoring one of the essential elements of Craigslist's grassroots popularity: the lack of profit motive, which many of its users surely find refreshing.
Yes, you've probably heard it before, but it bears repeating: Craigslist's flagrantly noncommercial mission could very well be its greatest brand asset -- intangible though it may be. Last fall, amidst all of the Web 2.0 buyout mania, Craigslist's Craig Newmark went out of his way to say he wasn't the least bit interested in selling his company to make a bundle. "Who needs the money?" he asked. "We don't really care. If you're living comfortably, what's the point of having more?"
Motley Fool co-founder David Gardner interviewed Craigslist CEO Jim Buckmaster in 2005, and in response to a question about the company's being "resistant" to generating oodles and gobs of money, Buckmaster explained: "Our goal is to maximize our societal value, if you will, and we figure our enterprise value, if I am using that term correctly, will take care of itself if we concentrate on being as useful as possible to as many people as possible, and doing whatever our users ask us to do and not doing anything that they don't want us to do."
eBay must know full well that it has to tread carefully if it really wants to try to emulate Craigslist's success. Craigslist truly appears to have completely ignored its competitors. Compare that with the heated, cutthroat competition raging in the Microsoft
Savvy Web users love Craigslist for the free -- and therefore completely disruptive -- services it provides. There are a few exceptions -- it charges employers posting help-wanted ads, and it requires a fee for apartment listings in New York -- but the free and non-commercial nature of the vast majority of its content makes for an excellent moat. Like Craigslist, Kijiji is free for now, but Wall Street is excited about the profit potential. So I'm looking forward to seeing how eBay does with this challenge, but I can't help thinking this might be a little more challenging than many suppose.
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