EBay buys Craigslist stake, dipping into classified ads
EBay buys Craigslist stake, dipping into classified ads: "EBay (EBAY: news, chart, profile) said Friday it's taking a 25 percent stake in Craigslist, a popular classified Web site where people can post or access information about jobs, real estate, events or people in their local area.Neither company would disclose the financial terms except to say that the stake eBay purchased was from a former Craigslist employee.
For EBay's part, the Craigslist investment is the online auctioneer's foray into classifieds, said eBay spokesperson Hani Durzy.
'We're doing this to gain exposure to this business model,' said Durzy.
The online classified business, which totaled more than $1 billion last year, according to J.P. Morgan, is expected to be one of the faster-growing sectors across all of online media.
It's a business that Craigslist is enjoying, alone, but which dominant search engines have been trying to tap through their localized initiatives.
With this investment, eBay is making an obvious move onto the competitive grounds of Google (GOOG: news, chart, profile), Yahoo (YHOO: news, chart, profile), Ask Jeeves (ASKJ: news, chart, profile), InfoSpace (INSP: news, chart, profile), Microsoft's (MSFT: news, chart, profile) MSN, InterActiveCorp's (IACI: news, chart, profile) CitySearch and Verizon's (VZ: news, chart, profile) yellow pages. It's a convergence of business models that CBS MarketWatch spoke of last year.
See: EBay vs. Google: They compete.
See: Fast-growing Craigslist.
Nearly 75 percent of eBay's gross merchandise volume is derived from auctioning goods. But a little more than 25 percent comes from selling fixed-price items. EBay essentiall"
posted by Jen @ 7:12 AM
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