Wednesday, May 18, 2005
EBay, the auction website, has continued its acquisition spree with the purchase of two classifieds websites on Wednesday for an undisclosed sum.
EBay snapped up London-based Gumtree.com, which runs a simple but popular classifieds site which lists flatshares, rental properties, and personal and job advertisements. Gumtree was founded in early 2000 and also has websites in Canada, New Zealand, Australia and South Africa, although 90 per cent of its business is in the UK, where its staff of 10 is also based.
EBay's other new acquisition, LoQUo.com, is a community-based listings website founded in Barcelona which operates websites for several Spanish cities alongside sites for Portugal, France, UK, Germany and Norway.
Both sites were bought by eBay's new classifieds website, Kajiji, which was launched in February and operates more than 50 city-based websites in nine non-English speaking countries including China, Japan, Germany and France.
EBay has not revealed traffic statistics for Kajiji, and eBay's Josh Silverman, vice president for new business ventures in Europe, said local classifieds websites "don't grow immediately overnight" as their success relied on word-of-mouth recommendations.
Community-based classifieds sites tend to rely on job advertisements for revenue, while providing other listings free of charge.
Like its new acquisitions, Kajiji eschews the complexity of many successful e-commerce websites. It uses a simple design, no banner advertising, and does not require users to register to browse listings. Kajiji's no-frills approach is in stark contrast to that of eBay's own auction websites, which requires both buyers and sellers to register with a comprehensive range of information.
As growth has slowed in eBay's two largest markets, the US and Germany, the online auctioneer has made several aquisitions in the local classifieds arena. Last year it spent more than ?700m buying up local European classidied sites including Mobile.de, Marktplaats.nl, and Rent.com. It plans to spend a total of $300m on investments this year, including $100m in China.
Mr Silverman said low overheads and marketing costs made community-based classifieds websites appealing.
He said Gumtree would continue to be run as a separate business, with co-founders Michael Pennington and Simon Crookall at the helm. There was no grand plan to integrate all the classifieds websites, and Gumtree would remain "just the way it is", Mr Silverman said, although he added: "We'll probably evaluate whether it makes sense to put up Kajiji's sub-brand next to Gumtree." The Kajiji website itself makes no mention of its auctioneering owner.
Kate Mackenzie
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