I am a big fan of buying and selling items online.  I think using sites like Craigslist and eBay provide efficient and easy ways to find cheap and useful items and also for getting rid of unwanted stuff (for a profit!).  My most recent purchase was a 3 person tent in great condition for just $10 on Craigslist.  What a deal.

This begs the question though, which service is better? Craigslist or eBay? This question becomes more and more important as we discuss the future of classified ads in relation to newspapers and media.  How will the progression of these websites compete not only with MSM classifieds, but also with each other?

I think the answer is a bit complicated.  Both Craigslist and eBay, while seemingly similar on the surface (both sites sell a wide variety of used items), Craigslist and eBay actually cater to different niche markets, and each site has its own pros and cons.

Pros of Craigslist

  • Great for purchasing large items (ie furniture) that are difficult to ship.
  • Consumers get to actually see items in person before they commit to purchasing. -Listings are grouped by cities, so finding items for sale in your area is relatively easy.
  • Craigslist ads go beyond items for sale and include personals as well as employment listings all on one website. -Straight-up purchase method (rather than auction) can provide immediate gratification for buyers and sellers alike.
  • Craigslist is free for all services except job postings.

Cons of Craigslist

  • Craigslist requires a larger degree of personal interaction between buyers and sellers.  As we've seen here, here, and here, this can be dangerous.
  • There is no real system for punishing bad behavior, as listings are anonymous. -There is no real way to customize your ads or to advertise your products.
  • Craigslist isn't available everywhere, while anyone all over the world can use eBay.

Pros of eBay

  • Reputable system for tracking and rating buyers and sellers so users can attempt to protect themselves. -Limited personal contact and protection of personal information.
  • Ability to track sales and purchases online.
  • Ability to build up a reputation as a reliable seller or purchaser.

Cons of eBay

  • Consumers never really know what they're going to get, and it's relatively easy to get ripped off.
  • Listings on eBay are not free.
  • Users have to wait until auctions are over to receive items or payments.
  • The system relies on sellers shipping items all over the world, so items can be easily delayed or lost with no real definition of delivery time.
  • eBay only sells items, not services.  Users must go to eBay's partner sites, such as Kijiji and StubHub to make purchases other than actual objects.

While Craigslist and eBay are really quite different, they are often lumped into the same category of Advertising 2.0.  It might be more accurate, however, to call Craiglist "Classifieds 2.0" and eBay "Auctioning 2.0".  

According to a recent article in US News and World Report , eBay's stock has dropped in value the past couple of years ("trading between $22 and $35 since last summer, down from a high of $58 in 2004), possibly the result of a nearly-saturated US market and problems trying to expand abroad (particularly in China).  In contrast, Craigslist reportedly has at least 15 million users per month "giving it a huge leg up on Ebay" (Ebay has 81 million users per year, and this figure is "flattening").

It will be interesting to see how these sites evolve in the next couple of years considering all the problems the newspaper industry is having with online advertising.  As newspaper classifieds become more and more irrelevant, Craigslist will certainly benefit.  Let's not forget though, that Ebay owns 25% of Craigslist.  In 2004, Steve Rubel predicted that the two companies would merge:

eBay and Craig's List are already the leaders in facilitating person-to-person commerce. They have also been steadily growing closer together – in August eBay acquired a 25% stake in Craig's List. In 2005 they will take this to the next level when eBay acquires the rest of Craig's List it doesn't own and then enables customers to blog right on their unified site. 

It turns out Rubel was wrong–the companies didn't merge in 2005.  But eBay did recognize the need to expand its business and to compete with Craigslist control over classifieds–thus the emergence of eBay sister sites like Kijiji.