How Facebook Could Eat Craigslist

A few of months ago TechCrunch reported how users had started to share screenshots of a buy- and sell-service on Facebook referred to as “Local Market”. It’s no secret that Facebook is looking into classifieds, but this was the first clear example of a service that had more in common with Craigslist than a social media-platform.

To see Facebook moving in this direction is in no way a surprise. Naturally, Facebook needs to start monetizing in other ways than advertising, and the highly lucrative classifieds market could be an important opportunity. For years now Facebook have seen users, organically, create local groups for “buying- and selling”. Facebook itself talks about tens of millions of user groups, where “digital flee markets” are amongst the most popular categories. And now – it seems – the time has for the social media-giant to go ahead and launch a service for this.

As always, when the online-giants make a move, the traditional market should be worried. Of course, when it comes to classifieds, the market means Craigslist. Even though one should be careful with proclaiming the beginning of the end for traditional companies, however, In other words, it would be a grave mistake for the likes of Craigslist not to take this very seriously.

Because if you don’t you haven’t fully understood the disruptive power in “connected data” – the single most important factor of why Google and Facebook have been able to dominate so much on the internet. Facebook is built around a so called “Social Graph”, which essentially is a way of storing data in a way that considers how data-points relate to other data-points. In a social network this translates into “users who know other users, who share things with each other”.

Even though Facebook started out with people sharing status-updates and photos, and evolved with the sharing of content (videos, articles etc) – it’s no difference to add products and services to this structure – which is what’s missing to actually become Craiglist. The Social Graph-structure comes with huge benefits. The most important the ability to scale globally as well as being able to operate hyper-local level aswell. From a user’s perspective you remove the anonymity layer, which could be very convenient since you rather sell something to a friend of a friend, if possible, rather than having to deal with complete strangers.

The weakness in Craigslist is that it doesn’t connect users to one another, at least not from a network-theory point of of view. It rather works a digital billboard. And with that follows a analogue logic without the possibility of leveraging the true values of an online presence, affecting both scalability, product development, and in the end user experience.