Facebook is moving to position itself as the hub of all interest-based communities (Pinterest, Spotify, Foodspotting, and Goodreads, for example) with its open graph platform. The people we follow in these networks are not necessarily our friends, but people whose content interests us. At the end of the day, all of these communities are peer-to-peer. Facebook can reimagine two big peer-to-peer markets with real identity, discovery, and imitation enabled by open graph at the center.
Reimagining The Classifieds Market
The classifieds marketplace is currently being cannibalized by services that operate in vertical niches. Here are list of few businesses that have been cannibalizing Craigslist:
- Airbnb, Roomorama, 9flats (sublets/temporary section)
- Zillow, Trulia (real estate section)
- Dogvacay (pet services section)
- Indeed, Simplyhired (jobs section)
- Sittingaround (childcare section)
The problem for anyone starting a new classifieds site on the web is twofold:
- Getting the people who have the need (e.g., apartment searchers)
- Getting people to serve the need (e.g., people who want to rent out apartments)
In short, the problem is discovery.
Facebook is very good at discovery and with 1 billion users — one-half of whom log in everyday — it is in a unique position to partner with niche companies and bring their listings together to form a full-fledged classifieds site.
The listings on a Facebook classifieds site could be populated by:
- Its partners (Airbnb, Taskrabbit, Etsy, etc).
- Facebook users who submit listings on to the site directly.
On the classifieds site, Facebook could take a cut out of every night booked, every task completed, every caretaker’s service requested, every service requested from a lawyer, for every job applied, for every gadget sold, etc.
Services like Airbnb, LegalZoom, and Gazelle could push all of their listings data to Facebook happily because this will help them promote their services to 1 billion-plus people, instead of them having to spend millions of dollars on marketing.
Facebook can innovate heavily in the way it sources listings data, bypassing the middlemen.With the data Facebook already has, it can personalize the listings data heavily (an engineer will be shown just the engineering jobs around him, and not the sales jobs).
Facebook can launch the classified service as a separate property, then integrate it with Facebook so users can access the service directly from the Facebook homepage and navigate through it seamlessly.
Making Use Of Facebook Connect
Services like Airbnb have integrated the Facebook Connect plugin as their primary login. Only people who have logged in to third-party sites using Facebook Connect can be allowed to push their listings to a Facebook classifieds site, as this will help put true identity and trust of dealing with a real name at the center of all transactions that happen inside the classifieds network.
The classifieds market currently is massively underserved and can be compared to mobile phone market prior to the launch of the iPhone. The individual markets like properties for rent, used cars, home services, and jobs are each their own billion-dollar business. The revenues of Facebook classifieds site will depend on how innovatively the listings can be sourced and the overall execution of the platform.
Putting Trust At The Center Of All Transactions
Imagine a link on your Facebook homepage that takes you to a page with products listed categorically, posted by other Facebook users and waiting to be sold. With the real names and the personal identity information Facebook has, it can facilitate transactions more reliably than other other peer-to-peer buy/sell markets out there. With its social graph data, Facebook could quickly weed out scammers who form closed groups and write fake reviews from multiple profiles.
Other networks that facilitate online transactions do not have the same kind of personally identifiable and communication data that Facebook can rely on. Communication data can help Facebook come up with a trust score for people who plan on selling or buying on the site for the first time without any history. The communication data Facebook has makes it the primary competitive advantage.
An average American family has about $7,000+ worth of unused stuff. Women make most of the purchase decisions in the household. With the imitation enabled by open graph, Facebook can help women list all of the unused stuff in their household. This market will be bigger than the market currently served by eBay.
Facebook can create two new brands (for instance, classifieds site four.com and buy/sell site fbiz.com) for offering these services and integrate them deeply into the main site to prevent brand dilution (and goal dilution). Before Facebook implements these changes, it needs a profile redesign with third-party interest-based networks at the center.
Nobody owns the market. eBay doesn’t own the peer-to-peer buy/sell market. Craigslist doesn’t own the classifieds market. Google doesn’t own the search-engine market. They just serve the market. If somebody comes along with a product that can serve the market better, the market responds. In the technology industry ,where change happens rapidly, Craigslist and eBay are ripe for an unseating.
Naren Reddy is the chief product officer at Wignite, whose products include wisiRecruit, a social media recruiting tool for colleges, and wisiPlan, an electronic independent learning plan tool. Follow him on Twitter at @naren.