My Own Pirate Radio

Mark Evans writes in “Web 2.0: Post-Newsweek Thoughts”,

Me: “So what’s Kijiji’s business model? How does it make money?”
Them: “We don’t have a business model. Everything on the site is free.”
Me: “Oh, then I guess Kijiji is a real Web 2.0 company.”
For months, I’ve been ranting about how the lack of viable business models within all these cool Web 2.0 services/applications is a huge and troubling problem. How can you create a business if the service is given away free?

It is odd, but it makes more sense when you look at the company ownership. eBay owns 25% of Craigslist, and wholly owns Kijiji. eBay is not in the same class as the so-called Web 2.0 companies. Very different motivations and much deeper pockets.

According to a March 8 2005 Newsweek article “eBay’s Stealthy New Classified Ads Site”, eBay started Kijiji to gain classified ads presence in countries other than the US: “…specifically 50 cities in Japan, Germany, Canada, Italy, China, and France–because eBay thought Craiglist has pretty much nailed the U.S. market.”

Strangely, they’ve since let the two overlap… Craigslist has presence in 13 Canadian cities, for instance, and Kijiji covers every single one of those and 8 more. The same looks to be true in Europe and Asia.

My predictions:

• Kijiji will stay free until amasssing a sufficiently large customer base. They will then introduce a pay-for-premium-ads model in certain vertical categories, as Craigslist does today with job listings. eBay might also opt to place “ads” for eBay listings on Kijiji pages, i.e. use Kijiji as a secondary market. (Think Nordstrom’s and The Nordstrom Rack.) Customer eyeballs = real estate for ads.
• Kijiji will maintain a geographical market overlap with Craigslist as a hedge bet, in case eBay can’t figure out a way to coexist peacefully with Craig Newmark. This is the time-honored “better they spend time using our software than someone else’s, even if we don’t make money off of it” strategy.

Also interesting - Philipp Heintze maintains stats tracking the listings volume on Craigslist, Kijiji, and several other classified ad sites.