eBay and Craigslist

The New York Times writes about what eBay can learn from Craigslist:

These days, triple-digit annual growth rates are rare among major Web sites. Meet that rarity: Craigslist.

Exceptional, too, is the ability to draw 10 million unique visitors each month without ever relying on venture capital and equity markets. Or the ability to attain fourth place among general-interest portals without ever spending a penny on marketing.

One way is to use its technology infrastructure to improve classified advertising. Hani Durzy, a spokesman for eBay, says its core business is a “transaction marketplace,” in which the sale is completed online with a binding contract.

In contrast to the “transaction marketplace,” classifieds merely enable private parties to get in touch. Viewed in terms of technology and legalities, Craigslist provides nothing more than the newspaper classifieds. To consummate a deal, you’re on your own.

But that seems to be all that its large and ever-growing base of fans desires. The offerings of Craigslist have never been more appealing, even though – or maybe because – it is retro in look and retro in its online technology. EBay uses an elaborate feedback apparatus to allow strangers who will never meet in person to feel safe doing business with one another. Craigslist does not need that apparatus. It is for locals only, and it is the one place that can fix you up with an entire life – job, shelter, furnishings, lover – at one stop, with minimal intermediation.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.