New challenge for newspapers

As if Craigslist and eBay’s Kijiji weren’t enough competition, newspapers now have to deal with a new competitor for the classified ad business – Wal-Mart. Like those other online classified sites, Wal-Mart’s local listings are free.

Wal-Mart’s free online classifieds are being powered by Oodle, which aggregates classified ads across hundreds of websites. By offering the free service, Wal-Mart is hoping to create “sticky” content that will make value-conscious shoppers come to the website again and again to check the latest listings in their local area – and see ads for things they can buy at Wal-Mart.

Most of the ad categories in the Wal-Mart classifieds deal with things that Wal-Mart itself doesn’t sell, such as cars, real estate and apartments for rent. There are also job postings, including Wal-Mart’s own postings, so it helps the giant retailer in that regard as well. And, yes, there are paid ads from other major corporations, so Wal-Mart is out to grab some online ad dollars.

To be sure, there are items being advertised that sort of compete with Wal-Mart’s business, but mostly used items, rather than new. The retailer apparently doesn’t see that as a threat. You can check out the beta site at http://walmart.oodle.com.

RBR/TVBR observation: The newspaper classified ad business is headed toward oblivion at high speed. What’s surprising is not the double-digit percentage declines reported each quarter by pretty much every publicly traded newspaper company, but rather that the first digit has generally been a “1” or a “2,” not a bigger number. How on earth do you go about rescuing this business when the price at your competitor – make that competitors, lots of them – is zero?

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