The big news in my part of the world today is that, a virtual clone of eBay that has risen to dominance in the eBay-less New Zealand market, has been sold to Aussie media company Fairfax for a staggering NZ$700 million [news via Dave]. Mr Barren thinks Fairfax would’ve been attracted by the 15.6 times expected 2007 EBITDA.

TradeMe’s founder, 29-year old kiwi Sam Morgan, stands to make over $220 million through the sale. Reading this report from local rag (owned by Fairfax), there are a lot of lessons which can be applied to the global ‘web 2.0’ space:

“In the seven years it has been running Trade Me has developed into the country’s most visited website. It has 1.2 million members who are expected to host 35 million auctions this year, selling anything from second hand furniture and clothes through to antiques and cars.

Trade Me does not charge users to list an item for auction online, but charges a commission on each sale.

Trade Me has also gained a large slice of the classified advertising market, launching real estate classified ads last year and cars in 2003. Unlike auction items, Trade Me charges an upfront listing fee for classified ads and has over 34,000 cars and 15,000 properties are for sale or rent on the site.

Trade Me’s growing slice of the classified advertising market was one of the reasons it was so attractive to Fairfax.

Peter Fowler, founder of the news and shopping website, said Trade Me’s growing classified presence had been killing classified advertising in newspapers and cutting into Fairfax’s revenues.

“Given that classified advertising has been the key to the profitability of newspapers, Fairfax has been forced to buy Trade Me or risk being overtaken by the Internet phenomenon,” Mr Fowler said. “

Near on half a billion US dollars for an online auction and classifieds site which dominates a tiny 4 million people market? Wow.