Friday, April 22, 2005

Oops..there goes the neighborhood

Both Jeff Jarvis and Alan Mutter link to an article in AdAge that forecasts newspapers could lose $4 billion of classified revenues by 2007, 9 percent of the $46.6 billion of total newspaper ad revenue, because of internet sites like eBay, and craigslist are providing greater value than traditional newspaper classifieds. What newspaper companies need to do, both to help themselves and listers, is to fund a rival to eBay.

I know that every attempt to crack eBay's monopoly has met with failure, but that is because the competition did not have the money or expertise like newspaper industry does. The venture could allow buyers and sellers to locate the site either from its own web address or through the newspapers' own sites. eBay has gross margins upwards of 60 percent and I think that another competitior can steal some business away from it and give listers another venue to place ads.