Facebook Getting Serious About Classifieds; May Relaunch This Year

Here’s a rumor that won’t go away – Facebook has been quietly searching for a partner to take over their year and a half old classified listings application, and may relaunch as early as the end of December.

According to our sources, Facebook distributed a request-for-proposal to a number of classified sites earlier this year (the same model they are using for Facebook Music).

The obvious partner is Oodle, which began powering Walmart Classifieds earlier this year. We’ve heard thin reports that they in fact have won the contract.

Whoever powers Facebook Classifieds (or Facebook Marketplace, as they call it) has a big hill to climb. Competing with Ebay (and their Kijiji) and Craigslist isn’t trivial. The original thought was that social networks were great for classifieds because you the buyers and sellers know each other. But Facebook’s current classifieds system shows anemic listings. The Silicon Valley network, for example, had a total of ten new listings added yesterday. San Francisco had twenty. New York City – zero. And for those who’ve forgotten, Microsoft launched their own classifieds site based on MSN friends and private networks (like businesses), and it went nowhere.

Part of the problem is the limited functionality of the existing classifieds system, which allows a short listing, a picture and communication via Facebook’s messaging system. Better software may mean more listings (although the bare-bones and massive Craigslist is a clear exception to that rule). Oodle, or whoever wins the contract, may also bring lots of listings from their other networks.

If Facebook gets this right there is a potential for lucrative advertising dollars – people looking to buy stuff are easy targets.