March 30, 2010 / 6:39 PM / 8 years ago

Kijiji begone: EBay rebranding U.S. classified site

SAN FRANCISCO (Reuters) - EBay Inc is rebranding its Kijiji classifieds business in the United States as eBayClassifieds.com, as it strives to replace Craigslist.com as the dominant player in the world’s largest classified advertising market.

<p>A pedestrian walks at the headquarters of eBay in San Jose, California February 25, 2010. REUTERS/Robert Galbraith</p>

“It’s game-on between Craigslist and eBay,” said BGC Partners analyst Colin Gillis. “It’s the difference between having a subsidiary trial brand versus leveraging the big brand.”

EBay became the largest global player in online classified advertising by acquiring classified businesses around the world. But it has struggled to bump Craigslist from first place in the United States.

EBay does not break out results for each of its classifieds units, but revenue from its global classifieds business rose 20 percent year over year in its most recent fourth quarter.

EBay also said it had launched mobile applications for Apple Inc’s iPhone for eBayClassifieds.com, and an updated version for its global marketplaces site that allows selling. An earlier version only allowed buying.

News of the rebranding of Kijiji was buried in a press release about the new mobile applications.

“We’ve completely revamped the experience. This isn’t just the name, it’s also the experience,” Lorrie Norrington, president of eBay marketplaces, told Reuters. “We’re bringing the halo of our brand and the trust that reflects to the classified properties.”

Norrington said the redesigned website for eBayClassifieds had new spam and fraud filters and 24-hour customer service.

Kijiji, which debuted in the United States in 2007 after becoming the No. 1 site in Canada, was viewed as eBay’s challenger to Craigslist, the privately owned local classifieds site where consumers can find apartments, jobs, or clear out the contents of their garages.

Two years ago, company executives at eBay projected that its classifieds businesses, including Kijiji and new acquisitions, could take the top spot from Craigslist within three to five years.

But Kijiji, which was cast as a more family-friendly alternative to Craigslist, struggled to find an audience in the United States.

“Kijiji was nowhere,” said Gillis, who listed the problems facing the site: “Not visited, hard to pronounce, not Craigslist, no compelling offering. Is that enough?”

Rebranding using the eBay name, albeit potentially more powerful, also carried more risk, Gillis said, especially as the company works to revive its flagging marketplaces unit.

“If it becomes a disaster it becomes a disaster for the eBay brand,” said Gillis.

EBay’s classifieds business is the fastest-growing unit within marketplaces.

“The eBay brand has many positives behind it, but it also has negatives,” Gillis said, noting safety concerns of buyers and seller defections to sites like Amazon.com. “Now they’re putting that brand, which still has tremendous value, at risk.”

Ebay will market eBayClassifieds.com through online ads on eBay.com and an email campaign, Norrington said.

The company’s global classifieds businesses, which operate in over 1,000 cites around the world, include Gumtree, Loquo, Marktplaats and mobile.de.

EBay and Craigslist are awaiting a ruling from the Delaware Chancery Court over eBay’s contested stake in Craigslist.

EBay paid $32 million for a 28.4 percent stake in Craigslist in 2004, but problems between the two companies came to a head after the 2007 launch of Kijiji in the United States. EBay sued Craigslist, saying the company illegally diluted its full stake. A parallel lawsuit brought by Craigslist in San Francisco is pending.

Shares of eBay closed down 0.51 percent at $27.14 on Nasdaq.

Reporting by Alexandria Sage; Editing by Richard Chang, Toni Reinhold

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