MSNBC Launches Classifieds

Internet news site MSNBC.com on Monday launched MSNBC Classifieds, bringing together national sources of classified ads in the jobs, real estate, cars, personals, travel and merchandise categories.

Rather than starting from scratch, MSNBC.com, a joint venture between NBC News and Microsoft, has partnered with online classifieds firms CareerBuilder.com, Cars.com, eBay, HomeGain.com, Match.com and Expedia.com.

“MSNBC.com continues to build its brand as the one of the top sources for news online,” said Charlie Tillinghast, general manager and publisher of MSNBC.com. “The classifieds are one area of print news that has not yet made the boundary-free leap to the Internet. MSNBC classifieds will let users quickly search the entire Internet community, not just their own backyards.”

MSNBC.com classifieds are positioned to offer users one-stop shopping across several categories, while providing additional advertising opportunities for partner companies to gain exposure to MSNBC’s audience. The initiative creates a new revenue channel for MSNBC.com, which marked its entry into profitability in its fourth quarter of 2004 on the strength of brand advertising sales.

Online classified advertising is a battleground in which newspapers are struggling to hold onto their traditional ad dollars, and online upstarts are working to expand their market share. Newspapers have a right to worry about losing one of the biggest parts of their revenue stream, according to Jupiterresearch analyst David Card.

“Classified advertising is one of the few internet markets where there is a channel shift, where dollars are moving away from traditional media and into online media, as opposed to most of the other Internet markets where spending is usually incremental,” he said.

A July 2004 report from Jupiterresearch predicts that online classifieds will continue their steady growth, for the first time keeping pace with paid search and display ads, though it’s not as big a market. Classifieds spending is expected to increase 26 percent from $1.5 billion in 2003 to $1.9 billion in 2004, and reach $3.7 billion in 2009. While all types of online classifieds will continue to grow, recruitment remains the largest category.

Card was skeptical of the value of MSNBC’s venture. While traditional classified advertising has succeeded because it has a local angle and it aggregates different categories, online classifieds have been driven by niche players, he said.

“Online, the local angle has not really taken off and the aggregation strategy hasn’t really played out,” Card said. “You don’t really have one-stop shopping, and I don’t see why consumers would want one-stop shopping. MSNBC gets a lot of traffic, but whether people go there thinking they’re going to find classifieds is debatable.”

One successful local online classifieds site is Craigslist, a Bay Area site that has expanded to include classifieds, discussion and community sites for 45 cities around the world. Last week, eBay took a 25-percent stake in Craigslist.

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