Will Rebranding Help eBay Take on Craigslist?

eBay may hold a strong position in online classifieds in foreign markets, but in the United States it's nowhere close. How much will the rebranding and redesign of its site help close the gap?

Now that eBay has killed off the Kijiji brand in the United States and affixed its own corporate moniker to its classified site, the ecommerce giant could be poised to make some inroads into a market dominated by Craigslist, according to one financial analyst.

"The rebranding of Kijiji in the U.S. to the more widely recognized/trusted eBay brand makes sense and is long overdue," Broadpoint AmTech analyst Ben Schachter said in a research note, adding that he hoped the move would put an end to eBay's (NASDAQ: EBAY) "disjointed domestic strategy in local classifieds."

eBay, which owns a 25 percent stake in Craigslist, has struggled to make a go of it in the domestic online classified sector on its own.

Last month, Craigslist saw 46.7 million unique visitors in the United States, compared to Kijiji's roughly 3.1 million.

"Clearly, Craigslist is a formidable competitor, as it is by far the largest classifieds site in the U.S., and also because it is not motivated by traditional shareholder interests," Schachter said. "However, we believe that eBay, with its user feedback system and payments platform, could win over users if it makes U.S. classifieds a higher priority."

Overseas it's a different story, however. In several Eastern European markets, South Africa, Australia and Canada, eBay sits atop the online classified sector, and will retain the Kijiji brand.

With the U.S. launch of the rebranded eBay Classifieds site, the company also released two mobile commerce iPhone apps, one for the regular marketplace and the other for the classified site, both promising sellers the ability to snap a photo of an item and upload and finalize a listing in less than a minute.

eBay is planning to debut an app for Apple's (NASDAQ: AAPL) iPad when the device hits the market April 3.

"We offer more choice in e-commerce formats for sellers and buyers than any other online shopping destination," boasted eBay Marketplaces President Lorrie Norrington in a statement announcing the apps and the rebranded classified site.

Along with the rebranding, eBay said it baked filtering technology into the new classified site to cut down on spam and fraudulent listings, and redesigned the layout to give it a more polished, professional look.

For Schachter, the rebranding and redesign go a long way toward aligning the classifieds site with eBay's core strengths. While most listings will be free, just as they are on Craigslist, he envisions the company generating revenue through a mix of performance ads, preferred placement premiums and fees for listings in select categories, such as jobs. Additionally, eBay could develop a cross-promotion scheme to integrate the classifieds to its primary marketplace, and leverage its PayPal payments platform to net a transaction fee from classified sales.

"With the eBay brand, PayPal (including potentially mobile payments), advertising opportunities and a renewed focus, we think that eBay has the potential to monetize a U.S. classifieds business in a way that Craigslist is not designed to compete against," Schachter said. "It won't move numbers this year, but over the longer term, we are pleased to see eBay refocus on the opportunity for classifieds goods and services."

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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