The perfect match?

In the eBay video we watched in class on Monday, there was brief mention that eBay now owned a 25% stake in Craig's List. After some reading I realize that this is now old news, but interesting none the less. From an interview with Craig's List founder Craig Newmark, I understand that the purchase was unintended (by everyone except Newmark's "friend," who sold his 25% stake in the company, and by eBay, of course). The agreement reached by the two companies was that eBay would retain their stake but remain uninvolved in daily operations, and Craig's List's core mission to "Provide a trustworthy, efficient, relatively relatively non-commercial place for folks to find all the basics in their local area" would remain intact (see Craig's List Fact Sheet).

Newmark hoped that the two companies could benefit from each other's experience. Newmark cites Craig's List's strengths as page load speed (which he credits to using an open-source environment) and efficiency (he said his company serves as many pages as Amazon with only 14 employees). From eBay, Newmark was hoping to gain experience with working on an international scale with a number of different regulatory environments and to pursue scammers more effectively. (Craig's List now, in fact, has over 500 sites in 50 different countries.)

The key that seemed to resonate with both companies was their community focus and their incredible site traffic (Alexa.com ranks Craigslist.org at 29, eBay at 10; Craig's List data puts them at 5 and 7, respectively). To my mind, they are also complimentary. Person-to-person transactions (or small-business-to-person transactions) are clearly a success on the Web, and while eBay claims the higher end of the market with small businesses and national and international transactions, Craig's List brings it all home as a way to trade (among other things) within a local community. Seems like a very powerful combination should either company wish to take more advantage of their now-formal relationship.