Oodle to Craigslist: We’re Bigger and Better Than You
By DONNA BOGATIN • Mar 26th, 2008 • Category: BIG PICTURE“Happy birthday, Craig Newmark,” the Oodle classifieds blog celebrated to close out 2007, cheering “Our favorite grandfather of online classifieds turned 55!”
In 2008, however, the Oodle CEO is not letting any category sentimentality get in the way of achieving his new year’s resolution: “cash flow positive by the end of the year,” Craig Donato recently indicated to me.
The Oodle CEO also told me how he really feels about Craig Newmark’s namesake craigslist:
We provide users with access to more listings than craigslist and a much better search experience.
It is not surprising that aggregator Oodle is stepping up the classifieds rhetoric at this time: Consumer fave craigslist remains the sole conspicuously absent listings publisher partner at Oodle, while three-year old, $19 million venture financed Oodle seeks to achieve the most important startup benchmark of all, profitability.
“Classifieds is a very big category,” Joe Horowitz, Managing Partner at JAFCO Ventures confirmed one year ago in announcing its participation in a $11 million round of funding for Oodle, the company’s second round. Donato sought the Oodle $11 million B financing to “accelerate efforts to acquire new users and continue adding functionality to the service.” Original Oodle investors Greylock Partners and Redpoint Ventures participated with JAFCO in Oodle’s secondary round of financing, an important continued stamp of institutional approval for the business model CEO Donato seeks to exploit.
Oodle’s model for doing business is apparently an adaptive one and I asked Craig Donato how recent changes to the Oodle business model will impact Oodle’s goal to grab more than its fair share of the estimated $30 billion market classifieds opportunity and how Oodle aims to grab market share from aggregator-resistant craigslist.
DB: When you launched Oodle three years ago as an aggregator of third-party classifieds publishers’ listings, you were able to gain access to the proprietary listings of others by, among other things, assuring consumers would not be allowed to post listings directly in Oodle. At the time, Oodle prided itself on aligning its business model with that of classifieds publishers, underscoring that Oodle had no intention to introduce its own direct classifieds listings as that would put itself in direct competition with the classifieds listings providers the Oodle business model is dependent upon.
Oodle has, however, recently enabled direct posting of classifieds ads by consumers at Oodle. How does the reversal of Oodle’s founding stance of no direct listings impact the Oodle business model? While the direct Oodle ads posted by consumers are also distributed throughout the Oodle network of third-party classifieds publishers, Oodle is nevertheless now in direct competition with its listings suppliers for direct listings, and, as Oodle continues to build its “organic following of consumers,” competitive tensions may be exacerbated.
How will the change in Oodle’s business model execution impact Oodle’s provider relationships and future growth trajectory?
CD: It is extremely important that Oodle aligns its business model with classifieds publishers, and enabling consumers to post through Oodle does not conflict with this.
When consumers post a listing through Oodle, the listing shows up on our partners’ sites. In short, this is a syndication model where we’re pushing listings to our partners, enabling them to build out their content.
Prior to this, we provided our users with links to post-a-listings forms on our partners’ sites. This functionality was highly requested and valued by our partners. Unfortunately, the process was cumbersome for consumers and we received numerous requests to come up with something better.
The syndication model is working well with partners. In addition to what we’re doing, classifieds publishers are also working with companies like vflyer and postlets (that similarly enable consumers to post their ads for free in multiple places). Partners are also using Oodle’s API to backfill their site with links to 3rd party listings from Oodle’s search index. These links, in addition to providing additional content, introduce a new revenue stream.
DB: How will Oodle increase usage and market share?
CD: First off, we need to continue to enable Oodle users to find what they’re looking for.
We’re accelerating our exposure by signing & rolling out distribution deals with companies that have local, online audiences. Classifieds is inherently a local experience — someone looking for a car or apartment in Cleveland, doesn’t care about listings in Charlotte. As such, it’s important for us to establish a critical mass of users & listings in each local area.
We currently have hundreds of partnerships with local broadcast companies (including Cox and Media General); newspapers (including San Diego Union Tribune and New York Times Regional Newspaper Group) as well as other online sites with localized audiences (including Local.com and Military.com).
Craigslist‘s dozens of “local” sites, however, continue to be absent from the Oodle partnership roster.
DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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