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2005 In Review: 8. Free Classifieds


(December 21, 2005)  The internet is really all about local. This year's extraordinary preaching about the flat earth aside, local services have stolen much of the thunder from the larger internet plays. This is not to say that the big job boards are in imminent danger. It just means that the competition between the new entrants will be waged at a local level.

Craigslist makes a powerful disclaimer on the top of each sale page:

Avoid scams & fraud by dealing locally:
non-local deals involving shipping, wire transfer, or cashier checks are usually fraudulent
there are no such things as "craigslist payment system", "craigslist buyer protection", or "craigslist seller certification"
please report scam attempts to
abuse@craigslist.org

Among other things, the large job boards and their new Microsoft Google competitors are going to have to deal with this issue. Local transactions can be vetted. National/International transactions are more risky inherently. Monster is addressing this internationally (where countries are usually smaller than the US).

These developmental issues aside, Free Classified Advertising was the big story in 2005 for many corners of the Internet industry. With a shortage of industry leaders like Tony Lee (The New York Times and Boston Globe being very notable exceptions), an entire consulting industry evolved to counsel and guide the frightened newspaper executives. Google and Microsoft both launched beta versions of services that will require huge advertising investments.

(Google appears to understand this. The agreement to purchase a $1 Billion stake in AOL finesses Microsoft out both advertising eyeballs and sales muscle. The entire trick for the Free services emerging from the technical giants is to understand the Marketing component. Google has a hands down advantage over Microsoft but are pikers compared to Ebay.)

Transactional advertising, as we once knew it, is in a death spiral. As the bottom drops out of the price, investment will evaporate. New forms of PR, branding and customer service will take up the slack for transactional advertising. First, the newspapers will dissolve and become something different and more entertaining. Then, the current transaction processors will have the opportunity to readjust their business models and deliver a newer product.

This process, called disintermediation, shifted into the next gear in 2005 with the main stage arrival of free classified advertising.

- John Sumser © TwoColorHat. All Rights Reserved.

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