eBay now has 20 local auction sites, including one in Los Angeles that it introduced in April. The company plans to roll out 53 such sites by the end of the year.
eBay's expansion into local auctions comes as the company has been beset by technical problems as well as targeted by earnest competitors. Despite such setbacks, eBay still dominates the market with 70 percent of online auction listings. Its new regional sites could pose a significant threat to newspapers and other companies that depend on classified advertising.
These latest regional sites come one month after the company launched a regional auction search feature and nine other regional sites, including ones for San Francisco, St. Louis, and Atlanta. Reed Maltzman, eBay's director of regional marketing, said the company sees the new sites as a way for users to exchange bulky or fragile items that may be difficult to ship.
"Our community asked us for this and we built it," Maltzman said. "The regional sites have the capacity of changing what people buy and sell on eBay."
Gomez Advisors analyst Martin DeBono says this change has newspapers worried. Because they depend largely on classified advertising for revenue, newspapers may be threatened by the increasing consumer interest in advertising goods online. DeBono said the interest is fueled mainly by the large traffic levels that sites such as eBay draw and because consumers can list items 24 hours a day, seven days a week.
"Will it have an effect on offline advertising? Yes it will," DeBono said. "Long term, advertisers are very concerned with the migration of their classifieds to the Internet."
But Maltzman says the items that people typically list on eBay differ greatly from most newspaper classifieds. While the bulk of newspaper classifieds are personals, employment, and new cars, Maltzman said the listings eBay gets are often the "dregs" of the newspaper classifieds.
"There's a distinction between people who like to exchange goods through classifieds and those who like to through auctions," Maltzman said. "They're really different markets and different demographics."
He added, "We see newspapers as partners more than as competitors."