eBay Launches Classified Service

Updated from 4:41 p.m. EST

Months after its purchase of a 25% stake in Craig's List, a network of community sites based mostly in the U.S., eBay ( EBAY) launched its own collection of online classified sites called Kijiji.

eBay's stake in Craig's List -- as well as its purchases of Rent.com in the U.S., Mobile.de in Germany and Marktplaats.nl in the Netherlands -- had led to speculation that the online retail giant would move more aggressively into the classified ads space. eBay had played coy when asked about its plans, which became more clear with Kijiji's launch.

Classified ads have long been an adjacent market that eBay could easily move into. Not only do they allow people to find goods locally that are hard to sell on eBay's sites -- notably, large items like refrigerators and furniture -- but it also opens the door to services like finding a babysitter, making travel arrangements, renting an apartment, getting a restaurant recommendation or finding a date for the weekend.

Kijiji is launching in 50 cities in Canada, China, France, Germany, Italy and Japan -- and it's not an accident that they are all countries where Craig's List has not established a strong beachhead.

"Because of the minority investment eBay has in Craig's List, we are supportive of their success," says Hani Durzy, an eBay spokesman, who said Kijiji has no plans for now to operate sites in the U.S. Both will have classified sites in Canada, but Kijiji's will be in French.

Kijiji's listings are free of charge, and eBay said the initiative wouldn't materially affect the company's revenue in 2005. "Kijiji may decide to monetize it down the road," said Durzy. "As with eBay, we're not directing how people use it, we'll let it grow organically." Depending on how the sites evolve, Kijiji may also take on functionality of eBay's sites, such as feedback scores for buyers and sellers.

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