Mark Evans

Another Blow for Newspapers?

Everyone knows Facebook has become a social networking phenomena but can the company’s influence migrate into other areas. We’ll soon find out as Facebook is adding free classified ads. For anyone looking to reach an audience of 22 million active users (many of them young people who don’t read newspapers), this is a huge opportunity.

Of course, this is yet another blow to solar plexus for newspapers, who have seen the amount of high-margin classified advertising shrink in recent years amid competition from online rivals such as Craigslist. (I’m sure many newspaper executives have a dart board in their offices with Craig Newmark’s photo on it, and will likely add Facebook CEO Mark Zuckerberg as well). Facebook will launch classified ads in four categories today: housing, jobs, for sale and “other”. People creating ads can select to show them only to the designated people or anyone in one of their networks.

The excitement about Facebook’s move into classified ads would have less impact if the service was becoming so damn popular. I spoke at a Communitech Tech Leadership conference yesterday in Waterloo, and conducted an informal poll of people with Facebook profiles. It was about 75%, which is impressive and astounding. During lunch, someone took a stab at explaining why Facebook has suddenly become red-hot. He theorizes that an increasing number of people have become sophisticated Web users while Facebook has emerged as a user-friendly social networking tool. (Unlike MySpace, which is far too busy unless you a hormonally-charged, multi-tasking teenager). The intersection of rising Web skills and Facebook’s easy access has spawned a user explosion. My theory is Facebook’s success is a combination of being at the right place at the right time, and the fact many people, including an increasing number of professions, find it to be a more useful tool than LinkedIn because they can connect with friends, family and business colleagues.

More other thoughts, check out Read/WriteWeb, which contends that Facebook’s rejection of a $1-billion takeover offer from Yahoo suggests it is “serious about diversifying its revenue stream, even though it will be a free service for now”, adding that social networks are “ripe for ecommerce”. ZDNet’s Donna Bogatin has taken issue with many of the points in my post.