Modeled on Craiglist, eBay has been operating classifieds marketplace Kijiji for some time outside the US. Now the company has entered the competitive and somewhat crowded “classifieds” marketplace here. Offering free classifieds, the site (without eBay branding) seeks to make inroads vs. vertical competitors and marketplaces such as Oodle, MSFT Expo and LiveDeal (now owned by YP.com) as well as newspapers (online and off).
This is an uphill battle but it also raises ethical questions regarding how eBay has been operating vis-a-vis Craigslist. Since its acquisition of a 25% stake in the company several years ago (from an early investor/employee who’d since left) eBay has had a board seat and essentially been looking at the way Craigslist operates from the inside.
Even though Craigslist operates in many non-US markets one could “rationalize” the potential conflict on the grounds that the US was the primary Craigslist market and Kijiji wasn’t in the US. But now that it is it would certainly appear that there’s a pretty massive conflict of interest for eBay given that it will effectively be competing with Craigslist. This CNET article quotes Craigslist CEO Jim Buckmaster as follows:
Buckmaster said in an e-mail to CNET News.com that because of Craigslist’s public service mission and disinterest in things like “market share and revenue maximization,” the company doesn’t really care who hops into the classified business.
“I’m not a legal expert,” Buckmaster wrote, “but I think it’s safe to assume (eBay) will continue to conduct themselves appropriately with respect to their responsibilities to Craigslist.”
Having a board seat on a company you’re directly competing with would seem to be a direct violation of eBay’s fiduciary obligations to Craigslist. In one sense the ultimate expression of Kijiji’s success would be to take Craigslist’s business — which by the way I don’t think it will be able to do. Google Base didn’t kill Craigslist or eBay, Kijiji won’t kill Craigslist.
Let’s see how much promotional muscle and effort eBay puts behind Kijiji.
Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.
