How Facebook Can Break Into The Markets Of Craigslist And Ebay

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Facebook is moving to position itself as the hub of all interest-based communities (Pinterest, Spotify, Foodspotting, and Goodreads, for example) with its open graph platform. The people we follow in these networks are not necessarily our friends, but people whose content interests us. At the end of the day, all of these communities are peer-to-peer. Facebook can reimagine two big peer-to-peer markets with real identity, discovery, and imitation enabled by open graph at the center.

The classifieds marketplace is currently being cannibalized by services that operate in vertical niches. Here are list of few businesses that have been cannibalizing Craigslist:

Airbnb, Roomorama, 9flats  (sublets/temporary section)
Zillow, Trulia (real estate section)
Dogvacay (pet services section)
Indeed, Simplyhired (jobs section)
Sittingaround (childcare section)
The problem for anyone starting a new classifieds site on the web is twofold:

Getting the people who have the need (e.g., apartment searchers)
Getting people to serve the need (e.g., people who want to rent out apartments)
In short, the problem is discovery.

Facebook is very good at discovery and with 1 billion users — one-half of whom log in everyday — it is in a unique position to partner with niche companies and bring their listings together to form a full-fledged classifieds site.

The listings on a Facebook classifieds site could be populated by:

Its partners (Airbnb, Taskrabbit, Etsy, etc).
Facebook users who submit listings on to the site directly.
On the classifieds site, Facebook could take a cut out of every night booked, every task completed, every caretaker’s service requested, every service requested from a lawyer, for every job applied, for every gadget sold, etc.

Services like Airbnb, LegalZoom, and Gazelle could push all of their listings data to Facebook happily because this will help them promote their services to 1 billion-plus people, instead of them having to spend millions of dollars on marketing.

Facebook can innovate heavily in the way it sources listings data, bypassing the middlemen.With the data Facebook already has, it can personalize the listings data heavily (an engineer will be shown just the engineering jobs around him, and not the sales jobs).

Facebook can launch the classified service as a separate property, then integrate it with Facebook so users can access the service directly from the Facebook homepage and navigate through it seamlessly.