Insider Chatter by Donna Bogatin

What a local online classifieds coincidence!

I enjoyed breakfast this morning with Craig Donato, along with a hearty helping of “innovators dilemma” discussion about how the Web company he founded and leads–Oodle–is seizing a $30 billion market opportunity ripe for exploitation due to mass media incumbent inertia.

At the same time, the latest touted “online marketplace for local services” was making noise: GenieTown. The newly funded startup has been operational for many months, but is apparently now hailing an “official” launch. Founded and run by a Stanford PhD candidate, Hassan Chafi, the site’s raison d’etre reads like a computer scientist’s thesis proposal!

Although GenieTown sprung from Chafi’s humble need to “find someone to clean his apartment while working under stringent paper deadlines,” Chafi obtained his startup financing by proclaiming an esoteric sounding “local service lifecycle model.”

In GenieTown “Whitepaper” speak:

At the core of this model, is a customer-centric continuum that runs through a series of action phases, beginning with a customer’s intitial interest in a service, through the fulfillment of the service and the customer’s recommendation of the provider to others. For ease of reference, we name these action phases: Explore, Communicate, Transact and Manage. 

In GenieTown consumer facing marketing speak:

What is GenieTown? Chafi–who has declared himself Mayor of GenieTown–asks and answers: It is where “clever people connect to buy and sell local services.”

“People with skills, expertise, and passion in a wide range of areas use GenieTown to offer their services. These “Genies” build credibility and trust through answering questions from customers, submitting articles and giving competent advice. Through their contributions and jobs well done, Genies increase their ranking on GenieTown. GenieTown enables service markets to emerge and thrive by creating opportunities for people to express and demonstrate their abilities, ambitions and passions.”

Whether in feel-good marketing prose, or feel scientific engineering text, however, GenieTown is not delivering on its “clever” experience promise, and real world “genies” are not readily apparent. Browsing GenieTown’s “featured” listings surfaces an array of impersonal, canned, standard handyman sales pitches, and spam-like hawking of online ecommerce franchise properties. FOR EXAMPLE:

We are L’bel Paris 40 Years in the Direct Selling Industry selling fine french fragrances,skincare and cosmetics company. We are in 14 different countries and growing!
We are now expanding here in the United States.
We are looking for business minded individuals looking to start their own business selling cosmetics from our L’bel Paris catalog.
EXELLENT MONEY MAKETR! Make anywhere from 25%-50% commission.
We are Not a Mult-Level MARKETING COMPANY!
EXCELLENT OPPORTUNITY TO MEET PEOPLE
LOTS OF COMPANY SUPPORT! FREE TRAINING!
PLEASE CONTACT: AREA SALES MANAGER

How does one “Become a genie?”: “Join now, it’s quick and easy!”…AND free, and apparently anonymous and unverified!

How does a “Genie” get featured on the GenieTown home page? GenieTown advises one “Genie” called “Power Of Cash”  of GenieTown’s Stanford PhD advanced algorithm:

If you are wondering how to be displayed on the front page: the two genies featured are selected from our list of genies with portfolio pictures. To add portfolio pictures, log into your account, click on profile and scroll to the bottom of the page. This allows you to upload and organize your pictures.

GenieTown “Genie” “Power of Cash”’s profile:

Cash Leveraging Genious. I Help others receive Financial Glory..

You go, Mr. Power, thanks to GenieTown’s open (too open) platform! Despite all of GenieTown’s Stanford engineering credentials, the founding team has unleashed a supposedly local Web platform that is friendly to global, online spam.

Oodle has been striving to “improve the way people buy and sell locally” for several years, fueled by $19 million in venture capital backing. Oodle CEO Donato told me today that Oodle is on track to be cash-flow positive by the end of the year.

Both a destination site and a third-party distributor and aggregator, Oodle cites “30 million listings from over 80,000 classifieds sites,” except Craigslist. Donato believes that Oodle is nevertheless complementary to Craigslist, recommending that consumers use Craigslist, plus Oodle for breadth of reach.

Straddling both direct-to-consumer and link-to-classifieds sites approaches poses Oodle business model challenges, however. Last June, I asked Donato for his reaction to the eBay launch of Kijiji. SEE: Oodle CEO Q & A on eBay, Kijiji & Craigslist Classifieds

The Oodle CEO told me last year about Kijiji:

It’s great for consumers and it’s great for Oodle. Providing consumers with choice is alays a good thing. And consumers are increasingly getting more options to post free classifieds listings. Obviously as consumers use more and different marketplaces, Oodle becomes more useful. It’s also important to note that consumers don’t publish listings directly into Oodle. As a search engine, it is our goal to partner with all the classifieds marketplaces on the Internet, big and small, local and national.

It is important to note now, though, that consumers ARE publishing listings directly into Oodle. How will the Oodle business model be impacted by the new, Oodle direct stance?

STAY TUNED TO INSIDER CHATTER FOR MORE: PART II ON OODLE COMING SOON!

MORE:  Yellow Pages Get Reprieve? The Myth of King Google Local Advertising ROI and
Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS and
Google Beware: Facebook Takes Local Advertising Gloves Off, ILM REPORT and
Judy’s Book: What’s On Sale? WE ARE! Ten Reasons Why and
Spot Runner Sells For Rival Google: Local SEM Bandwagon Grows

ALSO: Craigslist Q & A: Classifieds Community NO ‘Walled Garden’ and Craigslist PR: Same OLD Media?

PLUS: Like.com to Entrepreneurs: It’s the Revenues, Stupid! and VideoEgg Rocks: Unveils AdFrames in Silicon Alley: Google Next?

CONTACT DONNA BOGATIN

Corporate interest in shaping public messaging to its advantage is alive and well througout the Web.  

Craigslist and the University of California, Berkeley are a match made in new media heaven, so say the two parties and so goes conventional media wisdom. Indeed, Berkeley hails a shared “fundamental respect for alternative thinking in the public interest,” in hailing a $1.6 million Craigslist donation to the university.

In tandem with Craig Newmark’s namesake Craigslist contributing $1.6 million to Berekely to help fund a Center For New Media, Craigslist CEO Jim Buckmaster becomes founding member of the center’s executive advisory board. Buckmaster on Craigslist’s affinity for Berkeley: Their “history of challenging convention means a lot to us.”

Odd then, that despite public congratulations all around, little of substance has been offered on how the parties aim to “think rigorously about how new media will continue to change our lives and perceptions.”

Even more peculiar, new media bloggers dutifully regurgitate the UC Berkeley-Craigslist self-congratulatory press release of a “thrilling” financing of the “first endowed faculty chair in new media,” with nary a sighting of any of the supposed new media “critical analysis” that the Craigslist donation is said to support.

The blog “paidContent”–self-described as providing insight into “the economics of content”–acknowledges the lack of substantive information available in its one paragraph reposting of the press release announcement–”hard to say what the center itself is doing”–but apparently made no journalistic effort to find out for itself, or its readers!

Here at Insider Chatter, I have been making a deliberate effort to understand BOTH the economics AND the content of the Craigslist-Berkeley financial and executive collaboration.

I have submitted extensive, detailed questions to the Craigslist CEO with the goal of gaining a more in-depth understanding of how Craigslist will interact with Berkeley and how the substantial comittment reinforces the Craigslist mission, questions such as:

Among the prospective research areas of the Center, “privacy, reputation, trust, access and new ways to encourage socially constructive action,” what will you personally lobby for as areas of inital pursuit for the Center? What actionable types of deliverables will the Center research projects produce?

Buckmaster, however, declined to “say much about specific projects”:

Other than the advertised advisory role, i’ll try to be useful in any way that makes sense.

Surprising PR style speak from an organization that claims a “service mission and non-corporate culture” and touts a $1.6 million contribution to “partner with the Berkeley Center for New Media, as it is uniquely positioned to change the very way we think about new media.”

BUT, is Craig Newmark’s namesake Craigslist changing the way it thinks about any media coverage of its activities? Craigslist is not forthcoming about its philanthropic efforts beyond PR platitudes and it is secretive about its publicly posted Terms Of Use.

Since EveryBlock launched Thursday, I have been investigating and anlayzing the new site’s bulk use of Craigslist RSS feeds. SEE Craigslist vs. EveryBlock? UC Berkeley New Media Case Study and EveryBlock Tests Craigslist RSS Feed Generosity: Missed Connection? and have been in contact with both EveryBlock and Craigslist.

The issue extends beyond EveryBlock. Craigslist’s actions vs a vs Oodle and listpic caused many to consider Craigslist a “walled garden.” The hows and whys of access to Craigslist listings is of interest to the Web community at large. Unfortunately, Craigslist is not forthcoming about how it actually evaluates what is, or is not, acceptable to Craigslist.

I asked Buckmaster for clarification on how Craigslist defines “non-commercial purposes” regarding usage of its RSS feeds: 

“Third parties can easily ascertain what is permitted on our site by consulting our Terms Of Use and/or contacting us with any questions they may have,” Buckmaster has demeured.

Cragislist’s lack of candor with the media, and subsequently the public, is contrary to the ethos of both Craigslist and its founder.

Craig Newmark wrote about “community building on the Web,” seeking the “strength of good citizen journalism”:

When the correspondent has the courage to speak truthfully even in the face of powerful opposition….journalism’s essential role of being a watchdog on government and other important social and economic institutions.

This citizen journalist has been seeking to get the truth from Craigslist, a very important social and economic institution. STAY TUNED!

ALSO: Facebook Davos PR Blitz: Beware Scoble Hype, Users Still at BIG Risk and Google TV Ads Auction: NO AdWords Buyer’s Remorse

CONTACT DONNA BOGATIN

The Internet is STILL the (as yet not completely tamed) Wild, Wild West!

Craigslist, hailed by the University of California, Berekeley, as “one of the most popular Web sites in the world,” donated $1.6 million to the university’s Center For New Media this week to help try and sort things out.

SEE: Craigslist Q & A: Craig Newmark Philanthropy Matches Google’s Page and Brin

The director of the Center, UC Berkeley engineering professor Ken Goldberg, on compatibility with Craigslist: “We share interests in research areas such as privacy, reputation, trust, access.”

ACCESS? The shared Berkeley-Craigslist “research interest” can be explored via a perfect case study for application of some of Craigslist’s $1.6 million: A real world Craigslist example!

I analyzed yesterday, EveryBlock Tests Craigslist RSS Feed Generosity: Missed Connection?, pointing out issues of open Web access to information in relation to the launch of EveryBlock on Thursday.

The specific issue: The EveryBlock service is populated, in part, with Craigslist user listings. EveryBlock’s bulk usage of Craigslist’s publicly available RSS feeds, however, is not in apparent conformity with Craigslist’s Terms Of Use.

I asked publicly yesterday if Craigslist will soon terminate EveryBlock’s redistribution of the information contained in Craigslist’s RSS feeds. I also asked Craigslist directly if it would enforce its Terms Of Service vs a vs EveryBlock.

Jim Buckmaster, Craigslist CEO told me: “We generally don’t pre-announce the specifics or timing of enforcement efforts relating to our Terms Of Use.”

If Craigslist does NOT take action against use of its RSS feeds inconsistent with its Terms Of Use, what message would be understood by the Web community? After all, Craigslist has been called a “walled garden.” Oodle and listpic have first hand knowledge of Craigslist’s desire to preserve the integrity of Craigslist user postings, within Craigslist.

At the end of the EveryBlock day, how will third parties really know what is, or is not, permitted usage of Craigslist listings? Buckmaster told me:

Third parties can easily ascertain what is permitted on our site by consulting our Terms Of Use and/or contacting us with any questions they may have.

So, DID EveryBlock contact Craigslist to obtain an apparently required “license” for its bulk, non-personal use of Craigslist listings? I asked EveryBlock’s founder, Adrian Holovaty, how the site physiically obtains the Craigslist listings which populate parts of EveryBlock on a daily basis: ”We’re using Craigslist’s publicly available RSS feeds, pretty much every page has an RSS link,” Holovaty told me.

Is the EveryBlock use of “public” Craigslist RSS feeds–in apparent contradiction of the publicly posted Craigslist Terms Of Use–accepted, approved and/or authorized by Craigslist?  Both EveryBlock and Craigslist are mum at present.

Will Craigslist funded UC Berkeley Center For New Media be able to help sort things out?

MORE: Craigslist PR: Same OLD Media?

ALSO: Facebook Davos PR Blitz: Beware Scoble Hype, Users Still at BIG Risk

CONTACT DONNA BOGATIN

Bill Gates wants a “kinder capitalism”?

Craig Newmark’s namesake Craigslist has continuously prided itself on its community “service mission” and “uncommercial nature,” although the .org “was incorporated as a for-profit in 1999″ and the company is “doing well.”

Craig Newmark publicly shares that he has “everything he needs,” on the material front, thanks to his Craigslist endeavor, and is now particularly interested in non-financial returns:

I just have a reasonable sense of what matters to me, and I figure once a guy’s living comfortably and maybe if you can prepare for your future, then it’s more satisfying to change things. This is not that unusual in my basically nerd subculture; sometimes we’re surprised that people will pay us a lot of money, which is fun. And then once you do that, it’s more fun to change things. That does in fact reflect sometimes values most of us share, which includes the kind of Judeo-Christian tradition that the early Christians showed. So did the founding fathers. (as cited by PBS, November, 2006)

Craig Newmark has been using both his Craigslist fame, and “fortune,” in seeking to “change things,” through a variety of methods and vehicles.

Newmark is invited around the globe to share his insights and opinions on every aspect of the human condition: business, politics, social welfare…Newmark shares his Craigslist derived financial gains via diverse vehicles and strategies.  

Craigslist and team, however, are as close to the vest about their “charitable” financial state of affairs as they are about their “for-profit” one. Public confirmations of Craigslist and/or Craig Newmark related “donations” include:

The Craig Newmark Foundation pledged $10,000 to NewAssignment.net’s “first reserve fund” in 2006, according to Jay Rosen, who underscored the money comes from “his personal charity, not the company.”

The Craigslist Foundation, a 501(c)3 nonprofit organization featured at Craigslist, reported $231,000 in expenses to the IRS in 2005 for producing a “non profit bootcamp.”

A big $1.6 million charitable splash was made by Craigslist proper last week: The Universlty of California, Berkeley announced “plans to establish the first endowed faculty chair at the Berkeley Center for New Media with a donation of $1.6 million from craigslist.” The Craigslist $1.6 million will “support research, symposia and lectures” in the areas of “privacy, reputation, trust, access and new ways to encourage socially constructive actions.”

At the time of Craig Newmark’s direct contribution to NewAssignment.net, I asked him how he evaluates the “return” on his “investment” and timeframes for measuring success. Newmark told me:

I don’t see a way to evaluate this, and I guess I’m not too concerned, since this project I figure will mature in the two to twenty year time frame. Sometimes, you gotta stand up, and have confidence in others.

Craigslist has $1.6 million worth of confidence in UC Berkeley. Newmark underscores “Jim gets the credit regarding the craigslist endowed chair at UC Berkeley.” Jim Buckmaster, Craigslist CEO, also gets to serve as a founding member of the Berkeley Center for New Media’s executive advisory board.

What will Buckmaster’s role be at UC Berkeley? What does Craigslist hope to gain from the personal and financial collaboration? I asked Buckmaster for insights into the Craigslist $1.6 million donation for the Berkeley Center for New Media.

What will Buckmaster personally lobby for, in his executive advisory role, as areas of initial research pursuit and what specific actionable types of deliverables does he expect such research projects to produce? It’s too early to say, according to Buckmaster, but he will strive to be “useful in any way that makes sense.”

In explaining the Craigslist affitinity for UC Berkeley, Buckmaster said: “We rely upon technological innovations from the UC Berkeley community every day. We’re excited to partner with the Berkeley Center for New Media, as it is uniquely positioned to change the very way we think about new media.”

I asked Buckmaster which specific UC Berkeley innovations Craigslist has benefitted from to date and how future work products of the Berkeley Center for New Media will directlly impact Craigslist. Buckmaster told me:

Specific technical innovations that we benefit from everyday include Berkeley UNIX relational databases, BIND domain name server, RAID storage management and vi editor. We are not counting on the new center for specific innovations, but will enjoy collaborating with them in the years to come.

I asked the Craigslist CEO to drill down on the hows and whys of the $1.6 million donation.

INSIDER CHATTER: Did shareholder eBay have a voice in the Craigslist decision to donate to the new Berkeley center? 

BUCKMASTER: No.

INSIDER CHATTER: Will Craigslist rasise the rate of existing listings fees and/or implememt listings fees in new catgegories in order to support further large donations to other organizations?

BUCKMASTER: We don’t forsee any change in fees to support philanthropic contributions.

INSIDER CHATTER: Has Craigslist set aside a specific percentage of its earnings to specifically fund such donations?

BUCKMASTER: In recent years we have generally donated 1% or more of our annual revenue to charitable concerns.

The one percent rule? Sounds very Googley! According to Google.org:

In 2004, when Google founders Larry Page and Sergey Brin wrote to prospective shareholders about their vision for the company, they outlined a commitment to contribute significant resources, including 1% of Google’s equity and profits in some form, as well as employee time, to address some of the world’s most urgent problems. That commitment became Google.org.

Craig Newmark’s commitment is Craigslist.org. The little email list that could is as generous as the world famous $200 billion market cap Googley corporation.

SEE: Frugal Google.org: How NOT To Save the World On $159,000 a Day and Yahoo Shareholder on Microsoft Bid: AOL, Time Warner All Over Again?

PLUS: EveryBlock Tests Craigslist RSS Feed Generosity: Missed Connection? and Craigslist PR: Same OLD Media? and Craigslist vs. EveryBlock? UC Berkeley New Media Case Study

CONTACT DONNA BOGATIN

Buy.com announces a three-way with Facebook and eBay, aiming to usurp eBay personal selling leadership.

Dubbed “Garage Sale,” Buy.com heralds it is “putting Internet selling power in the hands of consumers” via ecommerce capability embedded within personal profile pages on social networking sites.”

First up, Facebook.:

For the first time ever, goods can be bought directly on the profile page, and purchasers never have to leave the page to complete the purchase transaction. With Garage Sale, consumers no longer need to pay listing charges associated with online auction sites, and they can take advantage of significantly lower individual transaction fees.

The Garage Sale capability is currently available to Facebook users, and Buy.com plans to roll out the service to users on other online social networks shortly. Facebook users simply add the Garage Sale feature from Facebook’s application suite and upload product information and photos to begin selling on their personal profile pages using Garage Sale’s secure transaction capability.

Buy.Com CEO Neel Grover on the opportunity: “We see tremendous growth opportunities in providing the millions of users on business and social networks with an alternative to eBay, and the ability to transform their personal profile pages beyond information-sharing.”

In good Web 2.0 coopetition fashion, Buy.com needs eBay to compete with it, though: Widely used eBay’s PayPal will help power payment processing.

Facebook has some big, bad coopetition issues of its own, with the arrival of Garage Sale on Facebooker profiles. The Buy.com personal selling meets social networking venture is but the latest individual commercial option available within Facebook, following a recent string of conflicting Facebook social selling initiatives including Oodle Classifieds Group on Facebook and Facebook’s own “Facebook Marketplace.”

Upon the launch of “Facebook Marketplace,” I underscored that by not committing to a single, unified personal selling offering, Facebook not only dilutes its own position in the marketplace, it fragments Facebook users’ commercial demand.

The “Facebook Marketplace,” according to Facebook:

Make it easy for people who share real-life connections to discover listings and sell items among friends and within their networks. Marketplace is about individuals selling or seeking items within Facebook networks.

The Facebook embedded Buy.com “Garage Sale,” according to Gene Alvarez, Gartner:

Anyone who has ever asked a friend if they knew someone who would buy their stuff understands the power of that sales model. when you add the Internet’s community, collaboration and sales capabilities, we will see yet another transformation of e-commerce and the dawn of online social selling.

Mark Zuckerberg dismissed any need to directly monetize “Facebook Marketplace” when it launched; He also dismissed any need for Facebook to share in any monetization achieved by third-party applications in Facebook, when the F8 platform launched.

Facebook is apparently succeeding in NOT making money off of Facebooker selling via Facebook; Buy.com will pocket a 5% sales commission, though.

PLUS: Facebook Profile Hijacked: Beware the Dangerous OPEN Social Graph and Perfect Online Newspaper Storm: Digital Ads Explode, Pay Wall Implodes

CONTACT DONNA BOGATIN

eBay vs. Craigslist? Who needs Google?

CEO Meg Whitman revealed eBay’s immediate plans for building out its new U.S. classifieds play, Kijiji, and where it stands on its Google search advertising spend in her report to Wall Street yesterday.

Bottom line? Kijiji is NOT just another Craigslist and Google is NOT the only traffic acquisition game in town, so believes eBay.

Whitman on Kijiji and Craigslist:

On the last day of the quarter, we launched Kijiji here in the U.S. to buyers and sellers in 220 cities in all 50 states. We believe our success with Kijiji outside of the U.S. is a great indicator of what can be achieved here and expands the buying and selling options we provide to people around the country.

We are interested in building a robust classifieds business in the United States. Because of our success internationally, we actually think it is the right platform on which to expand into the U.S. and serve classifieds communities in the U.S. with a new kind of offering.

Interestingly enough, we think actually that the U.S. market is large enough and diverse enough to support a number of different players in this area. This is a very fragmented market. Our plan is to use the U.S. classified business, it is really quite a differentiated offering versus craigslist, with a slightly different target market, and see what happens. If we have anywhere near the success we have had with Kijiji outside the United States, I think we will be quite pleased. We may learn some things that help the eBay U.S., but this is actually a classifieds play in the U.S.

We enjoy a good relationship with craigslist and we have been an admirer of their company for a long time. We don’t expect this launch to impact our investment in craigslist. We plan to maintain our minority equity stake.

With regard to investment in Kijiji, obviously we’ve made some investments in the site. But one of the great things about having a global platform is we can actually launch in 220 cities and 50 states at a relatively low cost using the investment that we have made in the Kijiji platform overseas. So it is one of those times when scale actually helps speed.

So we are going to largely grow that organically. We do a little Internet marketing, we do a little direct marketing, but particularly in 2007 and 2008, we want to see how fast we can grow this organically.

Whitman and CFO Bob Swan on Google:

Our growing advertising business, our partnerships with Yahoo! and Google are going well. We are bullish about the long-term potential of this monetization mechanism.

Our advertising business is starting to gain some significant momentum. Overall, advertising and other revenue was up 77% versus the prior year, increasing from 3.1% of total marketplaces revenue last quarter to 4.2% this quarter. This acceleration was driven primarily by the launch of advertising in our international eBay businesses. We’re pleased with the progress we’re making and believe that advertising complements our existing transaction-based platform, allowing us to capitalize on our significant traffic.

Late in the quarter we ran an experiment to see what would happen if we were to change our allocation of Internet marketing between our largest providers. We pulled back from Google, reallocated to AOL, Ask Jeeves and Yahoo! in particular. We learned a lot from this test that will actually drive our go-forward Internet marketing spend. It has to do with return on investment, where we can get the most leverage.

We have gone back to spending some money on Google. We will continue to reallocate not only between IM engines as we go forward on particular words, but also, frankly, we are reevaluating our spend between offline and online.

So a great test that we did. I think we learned a lot from it. I think we are going to be even more efficient than we have been in the past in terms of the efficacy of our IM spend. By the way, it had no impact at all on the results for the quarter, because the money we largely were spending on Google we moved to other partners and saw actually great ROI.

Long live coopetition? SEE: Google’s Big, Bad Risk: Coopetition

ALSO Read my exclusive interviews: Oodle CEO Q & A on eBay, Kijiji & Craigslist Classifieds and Craigslist Q & A: Classifieds Community NO ‘Walled Garden’

PLUS: TechCrunch: Hot, or Not, for Silicon Valley?

CONTACT DONNA BOGATIN