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eBay squares off with Craigslist, launches classified service

Auctioneer owns minority stake in Craigslist but that won't stop it from competing with Web's No.1 classified Web site.

Auction giant eBay has launched an online classifieds service that will compete with market pioneer, Craigslist.

Kijiji, a site eBay has operated overseas for two years, is now available in about 220 cities across the United States, spokesman Hani Durzy, said Tuesday.

"We're targeting young people and young families looking for bargains locally," Durzy said. "For now it's a free service and our focus is on building the user experience."

Reached by phone, Craigslist founder Craig Newmark sounded less than worried about competing against a powerhouse like eBay.

"My take is that anything that helps community is a good thing," Newmark said.

At the very least, the move by eBay marks a strange turn in the relationship between eBay and Craiglist. In 2004, eBay acquired a 25-percent stake in Craigslist and controls a seat on the three-person board.

At one time, the board consisted of Newmark, Craigslist CEO Jim Buckmaster and eBay founder Pierre Omidyar, who was replaced by another eBay representative.

"I think Craigslist has been an incredible success but we think there is market for more players," Durzy said.

Asked about what eBay may have planned for its Craigslist stake Durzy said: "We have a minority ownership and that's not going away. We're happy with that investment, both financially and strategically."