Wal-Mart challenges Craigslist

By The Associated Press

Wal-Mart Stores (WMT, news, msgs), the world's largest retailer, has launched an online classified advertising site, a move that opens a broader range of shopping to Wal-Mart's Internet customers.

The site is run through Oodle.com, a 3-year-old San Mateo, Calif., company, and links to Oodle's online offerings.

"This free, community-based resource allows customers to buy and sell items locally, find local jobs and learn about events in their area," Walmart.com spokesman Ravi Jariwala said June 3 in an e-mail message.

Jariwala said the site expands goods and services that Wal-Mart customers can buy through the company.

"It also further connects our community of 130 million customers who shop the Wal-Mart brand each week," Jariwala said.

Craigslist has long been considered the leader in the sector, which has seen the number of "for sale" listings surge in the down economy as more people try to sell items to help make ends meet.

Oodle Chief Executive Craig Donato said he has seen significant traffic growth in the last three to four months.

"There's lots of reasons, but I suspect one is that classified advertising is a category that will do well" when times are tough, Donato said.

Donato said Wal-Mart is a good fit for Oodle's online classifieds because Wal-Mart has such a strong local presence in communities where it has stores. He noted that local classified purchases start online but end with an in-person meeting where cash is exchanged for an item.

"The classifieds market is undergoing a huge upheaval," Donato said. Rather than paying to run ads in a newspaper, more people are choosing to run their ads free online.

He said classified advertising sounds like a "sleepy" portion of the ad sector, but it generates $30 billion every year.

The shift has created a separation between individuals taking out want ads and business classifieds for auto sales, real estate, etc.

Donato said Oodle's business plan is to serve both of those markets by offering free ads, which appeal to individuals, while also offering premium placement to those willing to pay for it, which appeals to businesses, he said.

The shift is a large one, he said. Retailers have customarily bought ads in newspapers.

"In doing classifieds, the most fundamental thing is creating some sense of liquidity for consumers," Donato said. That comes through having lots of listings and reaching lots of potential buyers. People not finding certain items can set it up so they get e-mails when those items are listed.

Donato says Oodle posts over 500,000 new listings daily, generated through more than 80,000 sites.

Oodle runs classifieds for numerous companies, including newspapers and TV stations and military.com, a consolidated site for the armed services.

Terms of the arrangement with Wal-Mart were not released.

Oodle was founded by a group of former executives of eBay (EBAY, news, msgs) and Excite, where Donato was in charge of searches and communities.