In Restless Pursuit of Craigslist’s Success

Microsoft tried. Google tried. Now it’s eBay’s turn to see if it can dethrone the Web’s most spectacularly successful underdog, Craigslist.

The Kijiji unit of eBay, a free classified ads service covering 13 countries online, was introduced in the United States in late June, and has already achieved modest success in some important markets, including New York. Its vice president and general manager, Jacob Aqraou, said it would market itself far more aggressively in 2008, and was further refining its service in hopes of putting a dent in Craigslist’s huge market-share lead.

“We’ve had half a person dedicated to the U.S. launch,” Mr. Aqraou said. “Next year, we’ll fully be up to the level of resources we should be putting against this.”

So far, Kijiji has done fairly well, climbing to second among all classifieds sites in the United States, with 1.8 million visitors in November, according to Nielsen Online. That is far behind Craigslist’s 20 million American visitors last month, and the average amount of time each Kijiji visitor spent — three minutes — suggests these visitors were still testing the waters. eBay also owns 25 percent of Craigslist. (Last month, the average Craigslist user spent more than an hour on the site.)

Like Craigslist, Kijiji is subdivided into geographic categories, with 262 cities represented in the United States. In New York, the fastest-growing market for Kijiji, the site drew more than 18,000 ads last week, triple the number from July.

Since its debut in early 2005, Kijiji has already surpassed Craigslist in many foreign markets, including in some parts of Canada. In the nine foreign markets that Nielsen Online measures, Kijiji led all other classified sites last month, attracting about nine million visitors to Craigslist’s 400,000.

Mr. Aqraou said Kijiji was meant to appeal to consumers who were uncomfortable with Craigslist’s laissez-faire approach, where ads for sofas and child care discussion boards are a click away from offers for sadomasochistic encounters and prostitutes.

“We’re focused on the young family model,” he said. As such, the service deletes ads with adult content and pictures that show too much skin, among other things.

And although Mr. Aqraou said most of Kijiji’s visitors had come from word-of-mouth referrals, it has spent an undisclosed amount on ads, including some aimed at people who searched online for Craigslist-related terms like Craig Newmark, the company’s founder. Kijiji also leaned on its parent company for marketing help, sending 15 million to 20 million e-mail messages to eBay users who fit the “young family” profile.

Kijiji has also relied on eBay for help in refining its site search technology. Those who search for “Graco strollers,” for example, will be shown other strollers if no Graco items are available. The technology is not immune to glitches, though. Last week, a search for copiers in New York yielded two ads for apartment rentals.

In mid-December, Kijiji introduced Spanish-language options for Miami and several Texas cities, and the company said it would probably introduce similar services for American cities with large populations of Polish, French and Chinese citizens, among others.

“It will pull in a lot of groups that have been marginalized by the mainstream Internet offerings,” said Colby Atwood, president of Borrell Associates, an advertising consultancy in Seattle.

“It’s a perfect example of why Kijiji will hurt Craigslist more than anybody else,” Mr. Atwood added. “It adds to what Craigslist does, without changing the underlying model of free classifieds.”

Unlike Craigslist, a 25-employee company with a public-service mission, Kijiji’s top priority is making money. Next year, the site will begin offering marketers the chance to post ads throughout the site, a strategy that has paid off in other markets. Revenue from eBay’s classifieds category jumped more than 100 percent in the third quarter this year from the same period last year, making it one of eBay’s fastest-growing units. (EBay does not disclose overall revenue for its classifieds unit.)

Newspapers and other companies that offer paid classified ads are watching the expansion of Kijiji and Craigslist closely. Mr. Atwood said Kijiji’s approach could be the model of the future, where classified listings are seen as just another category of free editorial content to surround with paid advertising.

Small local advertisers — the most logical source of revenue for classified sites — are quickly joining the Web. Borrell Associates estimates that local advertisers spent about $8.5 billion online in 2007, a 42 percent jump from 2006. Mr. Atwood expects an increase of 48 percent next year, to about $12.6 billion.

Craigslist continues to shun the advertising approach. Craigslist considers only those features that users request, and advertising does not qualify, said the site’s chief executive, Jim Buckmaster. It charges fees for employment ads and apartment listings from brokers in certain markets like New York, but says that is only to keep brokers from flooding the site with repetitive ads.

http://www.nytimes.com/2007/12/31/technology/31ecom.html?ref=technology