eBay's Kijiji = Craigslist Abroad

eBay, which bought 25 percent of Craigslist from a former employee in the third quarter of last year, has been busy expanding into classifieds, buying up classifieds sites outside the U.S. as part of a strategy to boost growth.

eBay quickly took its learnings from the Craigslist investment and has set up free classifieds sites in Canada, China, France, Germany, Italy and Japan under the brand "Kijiji," which apparently means "village" in Swahili.

eBay has been under pressure lately to maintain high double-digit growth and has alienated some of its sellers by trying to raise fees in an effort to grow revenues. Currently in about 50 cities in the six countries, Kijiji's model is identical to Craigslist — classifieds/community sites that enable buyers and sellers to connect free of charge. According to wire stories, eBay has said it has no immediate plans to "monetize" Kijiji.

eBay also said that it will not enter the U.S. market with Kijiji (how many "i's" was that?), largely because Cragislist already owns the space. (Craigslist charges for employment listings in all its markets and real estate listings in New York.) Craigslist does have international sites in Canada, Europe and Asia, so eBay's Kijiji will be competing with it in those markets.

Peter Zollman's classified intelligence reported that Craigslist was responsible for lost revenues of €œbetween US$50 and US$65 million€ to traditional newspapers, in the employment category alone in the San Francisco Bay Area. Assuming that's accurate, if one crudely extrapolates to the largest markets where Craigslist operates, we're talking billions of dollars in lost annual print classified revenues.

The Newspaper Association of America projected that U.S. print classified revenues will be approximately US$17 billion this year, up a little over 5 percent from 2004.

One question is: Will Kijiji (in addition to Craigslist) do to newspaper advertising internationally what the two sites have done in the U.S.?

According to Morgan Stanley, eBay contains more listings than all U.S. daily newspapers combined.