The online classified space has seen a lot of activity in recent weeks by a lot of companies taking a lot of different approaches. Oodle.com continues to grow with its business model of bringing buyers to existing ad-seller sites, including newspapers and online verticals. Google Base is beta-testing its big brand name as a marketing site where users can post whatever content they wish, and apparently wants to range from the retailer offering high-end chocolates in Cannes, France, to the seller hoping to unload a Pontiac in Pacoima CA. Even eBay is in the classifieds business with Kijiji.com, which it operates beyond U.S. shores so as not to conflict with its 25% stake in Craigslist. And last week saw the launch of Vast.com, an online classified player that says it has 15 million listings scraped from 50,000 Web sites and invites site developers to customize those listings to suit their users’ needs.
Into this fray steps Microsoft, which opened its classified-listing beta test—code-named “Fremont”, now christened “Windows Live Expo”—to users at the end of February. Expo has decided to differentiate its offering primarily by combining classified search with another hot area of endeavor: social networking.
Garry Wiseman, product unit manager for Expo, says the idea first came to him when he first came to Microsoft about nine years ago from a string of start-up companies in the U.K. He was looking for a good used car, and his new colleagues all recommended that he search the listings on Microsoft’s internal classified site, MicroNews Ads.
Wiseman says he immediately noticed two things about the site. First, it was a “very vibrant” site, with lots of new listings every day. That was surprising, given that its membership was only about 15,000 to 20,000. Wiseman ascribes that high usage to trust: “You’re dealing with colleagues, so you’re not afraid you’re going to be ripped off.”
Second, he found that the community was all looking for similar items—second-hand cars, carpool slots, and gadgets. But one common request struck him especially: many people on the Microsoft site were looking for babysitters and had enough trust in the community to post actual pictures of their children together with their home addresses. “I thought, you’d never do that on an external service—you’d be crazy to,” Wiseman says. “But on a company bulletin board, it’s fine.”
That led Wiseman and his development team to play with the notion of restricting listings by social groups. Microsoft’s product offerings include a lot of features with those self-defined groups, from the instant-messaging buddy lists of MSN Messenger to the domain names used in Hotmail and the MSN Spaces blog platform. So users can set the parameters for their posted listings just about as narrowly as they like, using Expo party invite service for their buddy lists or restricting their posts to a company-wide domain served by any e-mail provider, not merely Hotmail.
“If you look at the other services that have attempted to integrate social networking but failed, it was because most people don’t want to have to re-draw their social networks many times over,” Wiseman says. “We realized that we had this massive user base that we could instantly tap into. We already have about 200 million people using MSN Messenger around the world. So by combining that [with Expo], the minute you sign into our service, we can show you that Garry, who’s on your list, is offering a ticket to the big game.”
This personalization feature is important because so often things people want to buy or sell through classifieds have a personal impact. For example, if you’re buying or selling a spare ticket to a football game, you’d probably be more interested in doing business with friends and family than with a complete stranger, Wiseman says. Users of MSN Messenger and, in coming weeks, MSN Spaces will get a visual alert when someone in their buddy lists has listed on Windows Live Expo. Expo users can also sign up to get alerts via e-mail, instant message or mobile phone when their social groups have posted new items on Expo.
Wiseman says the domain criterion should be particularly useful for mid-sized to large corporations and for universities, populations big enough that they have a certain critical mass of potential buyers and sellers.
On the searcher side, all Expo listings are geo-tagged to a ZIP code, so users can restrict their search to a metro slice as small as a 25-mile radius if they wish, or they may widen their search to the entire U.S. Listings are linking to Windows Live Local mapping, so searchers can get a drawn or photo view of a seller’s area.
Some of the search parameters are highly customizable. For example, in real estate, searchers can choose to look at condos, apartments or houses. Within those categories, they can filter their search by location, of course, but also by number of bedrooms and bathrooms, square footage, lot size, age, and selling price or rent. That’s a compelling offering, Wiseman says, particularly when combined with photo maps that show the location and—soon to come—driving directions.
And still on the trust tip, every Expo registration comes with a dedicated mailbox, so that buyers and sellers can converse without exposing their broader contact information. That eliminates the spam or phishing worries that keep some people from engaging in e-commerce.
How will Expo build that critical mass of users that will enable it to compete not only with Google Base, Oodle and Vast.com but with the granddaddy of all online classifieds, Craigslist? Wiseman says he expects the company will score some wins as it pushes its Live Mail e-mail service out to colleges and universities, something it’s doing now. But he also points to the viral potential of Microsoft’s communications tools.
MSN Spaces started off last year with no bloggers but has now grown to 40 million users and 100 million total visitors simply because so many Messenger users saw little yellow stars next to the names on their buddy lists indicating a personal blog on MSN Spaces, went to the site and wound up registering, Wiseman says. “We hope to capitalize on some of that same influence as we progress and as our listings start growing,” he says.
As for listings, Wiseman says Microsoft made a conscious decision to go with a cold start. “We could have taken feeds, but we didn’t want Expo to feel like it wasn’t a proper person-to-person marketplace,” he says. Expo won’t deal for content like Oodle and won’t scrape Web sites like Vast.com but hopes to grow it organically a la Craigslist.
On the other hand, Wiseman says, it might eventually be able to compete as an online marketplace for small retailers. That’s one market Google is apparently aiming at with Google Base, which is now beta testing a credit-card payment system and has hinted that it might test-market a retail service in Europe. And online auctioneer eBay has announced plans for a non-auction market called eBay Express. Keeping Expo personal doesn’t mean that it can’t morph into a congenial marketing channel for small retailers of the type who now run eBay stores or for local service providers such as landscapers or electricians who want to sell themselves online without the hassle of tending a Web site.
Most classified sites depend on their users’ life-changes, Wiseman points out: changing jobs, changing homes, changing partners and buying cars. “You don’t do that kind of thing ever day, unless you’re leading a very busy life,” he says. “As long as we were offering classifieds, we wanted to make sure we were offering something compelling that would keep people coming back. That’s where Craigslist has done particularly well in creating stickiness; people keep coming back to look at the top 10 rants and raves.” Expo has a similar sound-off category called “SoapBox”, which Wiseman hopes will be populated with user-generated content, including comments on previous posts.
As for advertising possibilities, Expo will offer contextual advertising based on categories of listings, keywords searched and location. “So if I’m looking for a couch in the Redmond WA area, it may be that a local sofa shop fits in on the left rail there,” Wiseman says. “It’s awesome for offering very targeted advertising based not only on the category and the keyword but also the location.”
Expo is also considering offering for-pay premium categories. “We want to avoid charging individuals for listings, but there are certain categories where the listers are primarily businesses, particularly jobs,” Wiseman says. “If they’re taking advantage of the traffic being driven to the site, we think it’s fair they contribute to the service.”
Other possible fee services might include the ability to move online listings into newspaper ads, so that a landlord with a Florida condo could also take out print ads in snowbelt-state papers simply by ticking off a box in Expo. It’s a model that’s fairly common in Europe, Wiseman says, and could provide a shot n the arm for newspaper classifieds in this country.
The Expo service will roll into MSN Spaces in the near future; while it may eventually link to other blog networks outside the Microsoft walls, that’s not on the immediate agenda. A more immediate task, Wiseman says, is strengthening the social-networking ties for Expo, perhaps by offering referral payments if a member of your buddy list lands a job on Expo through your good offices. The service may also test a seller rating service as an additional trust measure.
Is there anything risky for Microsoft in launching a seller site that depends on trust and offers forums for public comment? After all, Microsoft is a company that comes in for more than its share of criticism for even the smallest things and gets barraged daily by both hackers and spammers. But Wiseman says the company is determined to use both human and electronic means to make sure that listings are accurate, sellers are fair and comments are kept clean.
“We’re very aware of what happens when people have the ability to publish things at will,” he says. “We’ve handled this job before with MSN Spaces. We’re actively monitoring, and we’ll make sure that people stick to the codes of conduct, because we want to make sure Expo’s a place where people feel safe browsing around.”