Facebook vs. Craigslist? NO magic formula in online classifieds

Craigslist vs. Facebook? Why Craigslist wins, big time I analyzed one week ago, with an inside preview of the new Facebook Marketplace classifieds offering.

Both Craig Newmark, Craigslist, and Chris Kelly, Facebook, participated in the Personal Democracy Forum yesterday in New York City and I chatted with them about the dynamic online classifieds market.

I wrote last Sunday:

What is the Facebook classifieds value propostion? Alas, Facebook has competing classifieds value propositions within Facebook itself, and amongst the greater Facebook developer network.

By not committing to a single, unified visionary Facebook classifieds offering, Facebook not only dilutes its position in the classifieds marketplace, it fragments Facebook users classifieds demand by enabling a diversity of classifieds options.

I asked Kelly why Facebook is implementing such a multi-tier classifieds strategy. Facebooker "choice," in a nutshell, was the reason given.

A multiplicity of user options for the same task, however, will undoubedtly yield user confusion and the lack of classifieds clarity indicates that there is NOT one, singular, winning online classifieds formula.

Newmark reiterated the Craigslist contention that his namesake free classifieds site is not the cause of a decline in print classifieds revenues, given that Craigslist postings are generally "new" listings, not displacement listings.

In other words, Craigslist classifieds postings would not exist, anywhere, if Craigslist did not exist. I made a similar argument in Facebook Classifieds? NOT ‘Another Blow for Newspapers’

In Craigslist vs. Facebook? Why Craigslist wins, big time, my multi-point argument for why the latest Facebook foray in the classifieds "business" does not set-up as a Craigslist killer references existing online campus-focused classifieds efforts, including third-party Websites integrated with Facebook.

CollegeClassifieds.com is a recent campus-focused entry into the crowded free online classifieds marketplace. Announced by Derrick Peavy just weeks ago, he may have beat Facebook to the "trusted" classifieds community punch:

"The emphasis is on establishing trust, encouraging honesty, and accurate targeting. Duplicate listings within a category are not allowed and we make an effort to prevent the kind of spam advertising seen so often on other services. When any content is posted, we look at where the content is coming from and then we also show that to the end user. We help the advertiser and the user filter out the noise."

Peavy was recently interviewed by Bryan Murley of CollegeMediaInnovation.org and he forwarded me the excerpt below:

Bryan: What about Facebook? What does that mean for CollegeClassifieds.com?

Derrick: I am a little embarrassed to say that before I set up a Facebook account, I just assumed that Facebook had classifieds, it made sense. Being 35, I am a little past the college age and never felt the need to set up an account on Facebook. I knew that MySpace had classifieds and so I just assumed Facebook was already doing this.

About a month ago, the rumor gets out that Facebook is going to do classifieds and the web "power users" and bloggers start to loose their minds. They predict CraigsList is going to suffer and that any and every little niche oriented classifieds site is going to die an instant death. I just don't believe that.

Donna Bogatin has a good rebuttal for that: Facebook Classifieds? NOT ‘Another Blow for Newspapers’

I think my own embarrassment serves as a good example of why this is not such a major issue. Of course, we all know that there is a 22 million member market on Facebook and you can already advertise there. But the point is, the lady looking for childcare, the apartment manager with units to rent, the shop owner looking for help; these people aren't potential Facebook classified advertisers, they just aren't. Either they don't know of the site (believe it or not), or they don't really care. You gotta remember, if you're over 25 and out of college, there is a lot of stuff competing for your attention, family, kids, work. Facebook and MySpace become less and less important.

Another thing, people think there is all this money to be made in online classifieds. Depending on who you talk to and how they gauge it, newsprint as a whole has lost anywhere from 5-15% of their classified business over the last 5 years to online outlets, and a lot of people point to CraigsList. But there are some contradictory trends in that assumption and that figure.

Classifieds were already under pressure before CraigsList, from sites like Monster, HotJobs, etc. More importantly, what people often miss is that much of the value that has been lost in print revenue wasn't really there to begin with, it's actually new revenue and new business that has been created since the web came into wide spread use. Classifieds are a natural on line commodity - a free commodity.

CraigsList did maybe $20-25 million in 2006, according to Forbes. So here you have the leader, the big guy, who flat out states that they are -not- competing and purposefully devaluing the ad - and they only did $20-25 million. When you factor in Oodle, Edgeio, Backpage, and all these other large outlets, it puts the whole Facebook move into perspective.

WELL SAID!