Every now and then, someone asks me if I think the fee based classified listing business that Rentals.com is in could eventually be wiped out by websites such as Craigslist that allow users to post their listings for free. And I’ve read several blogs that predict the demise of fee based listings. And there are some who wonder if GoogleBase could be a threat to the classified listing model and even perhaps a threat to the most well known classified site, Monster.com.
In my opinion though, fee based classified sites will be around for many years to come. Sites like Monster and StubHub have done an incredible job of building their brands and fees are the only way to support what they’ve done. A free site would never be able to build that level of brand recognition simply because the money won’t be there. And that brand recognition leads to loyalty as well as reaching audiences a free site would have a hard time capturing.
More importantly though, a paid model eliminates spam and provides a better user experience. Craigslist has actually found itself forced to charge fees in some markets because the listings in those markets were becomming flooded with spam and duplicate posts of the same ad. So to combat the spam, Craigslist first started charging fees in 1998 for job posts on the San Francisco page. But since then, they’ve started charging fees in more and more markets and just recently added 4 more markets at the end of 2007 where they also now charge for job postings. And the fees aren’t restricted only to job postings, Craigslist also had to start charging for apartment listings in New York to combat spam there.
As Craigslist discovered, to not charge a fee can easily lead to a very poor exeperience for everyone involved including the advertiser. It’s only 1:00 pm right now in Denver and already there have been 400+ listings posted on the Denver Craigslist apartment/housing for rent page. 400+ listings in one day is impossible for a tenant to effectively search through and screams that there is a ton of repeat posting going on which diminishes the results the advertiser who plays by the rules and only posts once is getting. If a fee were implemented, the tenants would be able to more quickly find what they are looking for and the advertisers wouldn’t have to resort to tactics such as repeat-posting to get results.
And as any free site becomes popular I think the spammers and repeat-posters will have to be controlled in some way and a fee is the only way to do that.
