Social network Facebook is set to launch a classified service to its users on Friday, according to the New York Times. The service will be free, though Facebook founder Mark Zuckerberg told the Times that the classifieds, which will launch under the name ‘Facebook Marketplace,’ might someday provide a source of revenue for the company.
Users will be able to create classifieds in four categories: housing, jobs, for sale, and other. Ads can be restricted by network or friends list, and can be broadcast to a user’s “news feed” — which is a Twitter-like stream of information about the actions of a user’s friends.
On May 7th, online classified website Oodle launched a sponsored group on Facebook to offer classified ads to Facebook users. It’s unclear whether Oodle will power the Facebook Marketplace, but since the Oodle group offers ads in eight categories, it appears that it is a separate offering. Further, Oodle’s Facebook group looks like it uses the standard Facebook API, and still brings people off-site to place an ad. It seems unlikely that Facebook would want to send users off their web site to post ads in their official classifieds section.
It will also be interesting to see how this new section affects their partnership with Jobster. The Facebook Career Center, which is powered by Jobster, has over 17,000 members, and their partners page touts Jobster as the “exclusive career destination on Facebook.” Separately, Facebook Marketplace could spell doom for the college-targeted classifieds site DormItem.
Conclusion
The Marketplace means that Facebook, which has rebuffed a billion dollar take over offer from Yahoo!, is serious about diversifying its revenue stream, even though it will be a free service for now. Social networks are ripe for ecommerce. An American Marketing Association survey last November indicated that social networking sites could make a killing by offering shopping services over the holiday season. 51% of those surveyed said they would use social networks to find deals or download coupons, and some 29% said they would consider shopping directly on a social networking site. There is a large piece of the $211.4 billion/year online shopping pie that social sites like Facebook could potentially be dipping into.
That said, the blog Trendspotting recently reported that social networks do not have much influence over people’s buying decisions. But though MySpace has offered classifieds for years, shopping is not something that social networking sites have generally pushed in the past. If Facebook is successful in rolling out their Marketplace, those purchasing influence numbers may go up.
