Facebook and Social Mediated Advertising

Facebook is taking a second swing at online classified ads, teaming up with Oodle to launch a classified section that combines selling with the more social aspects that Facebook's users have grown accustomed to. How Facebook will make money from them is still to be determined, however.

Facebook has revamped its online classifieds page. Its new look and feel is -- reminiscent of a Web 2.0-style community, with features that allow for more conversation and networking.

Facebook previously had a classifieds page, Facebook Marketplace, which it launched about 18 months ago, but the site decided to pull it and start again, Oodle CEO Craig Donato told the E-Commerce Times. It selected Oodle, whose online classified software platform supports communities on AOL and MySpace , to relaunch the page, which will carry the same name.

"Online classifieds in social networking communities, as it turns out, is a harder nut to crack than many people would expect," Donato said.

Facebook is rolling out its new classifieds page over a 60-day period.

The site's goal was to keep the buy and sales interactions as lightweight and conversational as possible, Donato said. "The ads just become part of the general conversation -- 'Bob' is writing about remodeling his home and selling furniture that he doesn't need and here is an ad for a sofa."

Charity Participation

The fundamentals of the site work just as an online classified would, with sellers registered the items they are putting up for sale and buyers browsing the listings. They contact sellers through Facebook and then the pre-sale negotiations and exchange of money takes place offline.

Oodle added a few twists, though. Facebook members can also go to the Marketplace, post and listing and then select "Sell for a Cause" Once posted, the listing is distributed to friends through news feeds -- essentially allowing the seller to turn its friends network into a fundraising channel.

Facebook Marketplace relaunched with more than a million registered nonprofits to which Facebook members can choose to donate. Oodle has teamed up with Network for Good to collect payments and distribute the collected money to charities.

Revenue Model?

It would be interesting to track how much is raised through this channel. More to the point, the online classifieds and the revenues that it can raise could also provide a valuation proof point for Facebook, Rob Enderle, principal analyst for the Enderle Group, told the E-Commerce Times. "Facebook really needs a revenue model that can support valuation."

However, it is unclear whether or how Facebook would capture a percentage of any of this revenue stream. More than likely it will be leveraging the content to fine-tune its ad strategy, he said. "Facebook knows a lot about its constituency and should be able to route ads appropriately." It also has a captive audience, he noted. "For all these reasons, this should turn into an interesting and probably very successful experiment."

War Over Classifieds

Indeed, online classifieds have proven to be one of the more bullet-proof content generators for Web 2.0, once a particular site has gained traction. One only has to trot out the iconic Craigslist to understand the appeal. When it launched some 10 years ago, Craigslist cut the legs out from under newspaper classifieds -- one of the reasons why the industry is in such turmoil today.

Now as sites such as Facebook, AOL and MySpace gear up with their offerings, they are looking to do something similar to Craigslist. At the end of last month, AOL launched AOL Classifieds -- also powered by Oodle -- where consumers can search through local classifieds listings by ZIP Code.

AOL Classifieds also links consumers to classifieds listings on other properties within the AOL network, such as AOL Autos, AOL Jobs, AOL Personals, and AOL Real Estate.

Source:
Facebook Takes Another Poke at Classified Ads
Erika Morphy, E-Commerce Times