EcommerceBytes-NewsFlash, Number 1172 - December 14, 2005     0 of 5

AOL Exits Classifieds Space as Google and Microsoft Enter

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AOL is discontinuing its classified ad system, according to an email sent by antiques-mall TIAS to its merchants. TIAS (http://www.tias.com) worked with AOL's classified ad system for 2 years by sending a feed of TIAS merchant listings to AOL Classifieds.

"AOL has informed us that they will be shutting down their classified ad system to everyone as of December 30th, 2005," the email stated. "The last upload from TIAS was today. The current items listed on the AOL classified ad system will remain online until the system is shut down on December 30th."

Microsoft and Google are both developing classifieds systems, named Fremont and Google Base, respectively. And both companies are in discussions with AOL to enter into an advertising partnership, according to CNET (http://news.com.com/2100-1030_3-5985418.html) and the Wall Street Journal, which had reported in October that Google and Comcast were in serious discussions with Time Warner Inc. about buying a minority stake in America Online for as much as $5 billion.

On December 7, the Wall Street Journal said "the battle to seal an advertising alliance with Time Warner Inc.'s AOL intensified as Microsoft Corp. pushed to hammer out final details of a partnership," but said Google could also come up on top. ("A sticking point so far has been its (Google's) reluctance to guarantee Time Warner a minimum amount of revenue, which Microsoft has done, said one person familiar with the talks.")

The Journal said under the Microsoft scenario, AOL would switch to using Microsoft's search engine, and the two companies would set up a joint venture to sell online advertising across both AOL and Microsoft's MSN portal.

AOL founder Steve Case wrote in the Washington Post on Sunday that Time Warner should split the company into several independent companies and allow AOL to set off on its own path (http://digbig.com/4fqyx). He referred to published reports that speculate Time Warner would use AOL to form a new joint venture with Microsoft to try to compete with Google, but calls such a move "a mistake." (Case sees a stand-alone AOL's greatest potential as an Internet phone company, social networking service and series of vertical portals hosting multimedia content.)

AOL's decision to shutter its classifieds offering gives no indication to which company may win out in the end, since Microsoft and Google are both developing their own classifieds system.

TIAS' message to its merchants, which specialize in antiques and collectibles, may give some indication of why AOL is closing its system. "This was not a huge source of sales or traffic for us, so it should not have a major impact on us."


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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