In this article a survey about one of the hottest market on Internet: online classified ads.
With Google and Microsoft now offering free classifieds, Craigslist ( http://www.craigslist.org ) and its free classifieds growing into an international force, and EBay investing more than $1 billion in classified advertising sites worldwide, this market can be considered the new Eldorado.
Free online classified ads market starts in 1995 when Craig Newmark began sending friends in San Francisco e-mail messages with lists of local events. This became Craig’s List, a massive not-for-profit community service which has expanded across the most important cities in the United States and many cities in other countries. The service gets 4 billion page views and 10 million unique visitors every month, with a staff of just 21. Annual revenue of Craigslist approached $10 million .
In Europe in 1999 Het Goed Beheer BV, a company that owns second-hand retail shops in The Netherlands, founded Marktplaats.nl ( http://www.marktplaats.nl ), a website where buyers and sellers can meet to trade a wide array of items, from clothing and collectibles to cars and household items.
Today it is the most popular classifieds website in The Netherlands with more than one million listings at any given time. In 2003 they launched an international version of the service, Intoko.com, into Spain and Germany, shortly followed by Canada and Turkey.
In November 2004, eBay acquired Marktplaats.nl from HGB. Ebay paid €225 million for a company that was estimated at the time to be turning over €12 million – a multiple of 18.8 times turnover, against a norm for newspaper companies of around 3.2.
It is clear that eBay is confident that the Marketplaats business model will work across the world, and that further expansion will justify their heavy investment.
Marktplaats.nl was only an acquisition of Ebay in the classified ads space:
In little market like Italy classified ads are hot too. Trader Classified Media, one of the largest classified advertising companies in the world, has recently finalised the acquisition of Annuncigratuiti.it (classified ads site with about 70,000 listings) for €1.4 million. Moreover, a Kijiji clone, Annunci.net ( http://www.annunci.net ) is starting its activities in Italy.
With this market it is clear that some advertising is moving from print to online, and it can only be assumed that this trend will continue relentlessly. Most of the classified market will shift to the Internet. The competition on the Internet is more intense, causing lower margins, with lower profitability of printed product.
What is the key factor in order to have success in this busy market? Innovation.
Mobile is set to revolutionise the media and communications in a way that nothing has done to date. Already more media consumers use mobile SMS texting services than do the Internet.
Mobile offers a range of specific benefits in the classified arena. It allows advertisers to place and receive advertisements where and whenever they wish. Charging for the advertisement (or alert) can be integrated into the phone billing service, making payment a seamless aspect of the service; Moreover mobile phones can now carry advertisements with pictures. The next generation of phones will be able to carry video-clips or internal views of rooms in homes.
AdsML will be an international standards initiative to create the first truly global, comprehensive standard for end-to-end advertising workflows.
The initiative was set-up to provide participants in the advertising supply chain with a set of internationally adopted XML based specifications and business processes that will create value and reduce costs by providing standardized electronic processes for all sectors of the advertising industry.
AdsML provides an XML framework for unifying and extending XML advertising standards.
These are all factors that need to be facilitated by integrated technical solutions, which enhance the general listings and add to the value and usability of the site.
