Portal giants announcing sms bidding and mobile payment services
Also the portal giants Google and eBay made some important announcements this week around sms bidding and mobile payment services:
- Google has filed a patent for a mobile payment system that uses text messaging and includes the terms gpay and gbuy. The patent application said "The payment process may occur through the simple composition by the payer of a text message." (More)
- eBay is rolling out an sms re-bidding service in the UK, France and Belgium. "The SMS re-bidding service enables users to track bids through "outbid" alerts, so they can react from their mobile if they need to increase a bid." (More)
Free is no longer free in the free online classified world
De Koopman reported that Marktplaats.nl, acquired by eBay in 2004, has started to monetize 5 classified categories (boats, motorbikes, etc.). The placement of a classified will cost the consumer €9 (more…).
Question remains: how can you differentiate without providing a true premium in an online world where the competition such as Speurders.nl is only one click away?
Opinion piece: eBay’s bet on classifieds – Craigslist reality
eBay is reaching the boundaries of the once ultimate-and-unlimited gross merchandise volume, at least within its existing online auctioning markets (source: OnlyEBAY). A recent series of posts demonstrate eBay’s activity in the classified space using its brands such as Gumtree and Kijiji. Their 25% stake in Craigslist is also put into the classified domination race.
While analysts write that "the longer-term opportunity for classifieds is very large and eBay may monetize it in a variety of ways" I am a very skeptical about the ‘longer-term’ success. The three horses in the race, led by Craigslist, have no true differentiator besides providing another ‘free’ service with low value:
"The major flaw of Craigslist is that it is overloaded with crap" according to Henry Blodget. Even more, Craig Newark is certainly not considered as eBay’s role model: "Craigslist is run by socialists who appear to have no interest in turning it into a real business."
Paul Kedrosky says the same with more words (opinion piece), ultimately questioning the leadership of Craigslist: "eBay doesn’t think it will ever see any liquidity from the nutters at Craigslist — they’ll likely turn the whole company over to some Che Guevara preservation society or something — so it’s calling it quits on the thing."
Dominating the classified industry, a $100B dollar industry according to Classified Intelligence LLC., will require more than providing a free service. Even worse, the cold war between eBay and Google doesn’t provide eBay with a monetization model for its free classified listings. Poor shareholders…
Ben Schachter sees the solution that could mitigate the damage: partnerships between newspapers and eBay. According to Schachter such a deal is not beyond the realm of possibility, considering the successful cross-media initiatives from Yahoo and Monster.
Ken Doctor, a newspaper analyst, does acknowledge the value of newspaper partnerships but has a serious concern "Over the years, eBay has approached newspapers episodically, but they didn’t have people who have knowledge of the business." This is exactly where Mobiya is playing a significant role, connecting newspaper classified and online classifieds over a new and innovative mobile user experience.
Continued… eBay and Classifieds
Contextual advertising is considered to be the next thing to subsidize loss-making free online classified sites. eBay cooked a major revenue share deal with Google to monetize its free online classified sites overseas (outside the US). eBay’s overseas classified portfolio include sites such as Marktplaats.nl, Kijiji, Gumptree, mobile.de, LuQUo. This will fuel these sites with necessary revenues to compete harder with newspaper publishers in the battle for the classified.
eBay’s CEO Meg Whitman stated in a conference call with investors that the company’s online classifieds portfolio is continuing its upward trajectory. Whitman says "This is a business we weren’t even in two years ago, and now we’re in more than
400 cities. While this is still a largely nascent business, we see great
opportunities to further expand and monetize classifieds. As an example, we have
recently introduced advertising in some markets, and the early results are
promising."
eBay CFO Bob Swan said later during the call, "Our classifieds business is
rapidly gaining traction in all of our served markets. Globally, we now get over
22 million unique visitors per month, growing at close to triple-digit rates,
and we’re beginning to monetize some of our classified sites via contextual
advertising."
Read the article "eBay uses Google to monetize classifieds sites" or read the complete transcript of the Q3 earnigs call at SeekingAlpha.
Segmented marketing: the future of classifieds
12manage defines segmented or niche marketing as the process of finding small but potentially profitable market segments and designing custom-made products or services for them. Typically, the small market segment has been overlooked by larger competitors, but is still large enough to be attractive.
eBay has become big and very profitable and started to drive diversification, mainly on a markets basis: introduction of eBay classifieds, launch of eBay express shopping service, etc. eBay’s focus on broadening their markets, have left certain untapped niches open to segmented marketing competition:
- (UK) Oodle debuts local classifieds search for students: article and website
- (UK) Carphone to auction used mobiles online: article and website
eBay Belgium announces classifieds
Media groups, beware! This is a serious message. eBay Belgium took the lead in developing an online classified portal under the eBay brand (article in Dutch). eBay Classifieds will launch on the 21st of August. Keep an eye on their beta site. This is a very unique initiative due to past investments eBay has done abroad. eBay bought existing classified portals (e.g. Marktplaats in The Netherlands) or invested in establishing a new classifieds brand (Kijiji). If proven successful in Belgium, the other eBay countries will follow soon.
This announcement was followed in the same week with the launch of a new price schedule. Insertion fees and final value fees go up (a lot). This is all part of an effort to re-position the online auctions in relation to the professional storefronts. This is a major exercise to optimize the revenues, capture new market share and shake-out the market.
What is the consequence for traditional media groups, or even larger existing online media players?
- eBay will chase the Real Estate (Immo) market, which was impossible to capture over online auction
- eBay will accelerate its Car trading sales, as most people want to have a fixed price and a conversation (Skype is too early)
- eBay will make its first moves into Job ads and start a learning curve to enter and capture this enormous market.
Message to all established media: respond with an innovative message and a solid business model. Work with a partner that can redefine the market and beat entrants out of your territory.