Facebook To Compete With Craigslist For Classified Ads [Rumor]

Facebook apparently plans to take on Craigslist head to head: The social networking site is reporting fast tracking a new service that will directly compete with Craigslist’s bread and butter, its classified ads.

Citing two anonymous Facebook sources, The Daily describes the classified ad project as follows:

“The new tool, which is tentatively called Marketplace (borrowed from another deprecated Facebook app) would allow users to create short advertisements that appear in their friends’ news feeds notifying them of everything from apartment rentals to furniture sales to job boards. In short, practically anything you do on Craigslist can be done with this new service.”

In other words, as CNET points out, “Theoretically, at least, a project like this makes sense for Facebook as a new twist on classifieds — one that relies on latter-day word-of-mouth as opposed to the universal firehose of Craigslist.”

As The Daily further explains, Facebook’s approach to a competing classified ads network will be the reverse of what occurs on Craigslist, because of the built-in news feeds and existing user relationships:

“The whole affair seems to be very targeted, allowing users to locate anything from roommates to jobs by taking advantage of Facebook’s vast network. This focused method is the very opposite of Craigslist’s wider (but so-far successful) shotgun approach; instead of broadcasting ads to everyone on the Web, Facebook will just display those that are relevant to the users that might be interested. The move is a shrewd one, at least for the Web, and is proof that Facebook’s future probably isn’t just about corporate sponsorship.”

Facebook apparently tried something along these lines in 2007, but that that version of Marketplace was unsuccessful.

If this rumor proves to be true, do you think Facebook will be able to effectively compete with Craigslist?