EBay Inc will rebrand its Kijiji classifieds business in the United States as eBayClassifieds.com, in an about-face for a venture the company once touted as a challenger to popular Craigslist.com.
EBay has bought classifieds businesses around the world in recent years to become the largest global player, but it has struggled to take on Craigslist in the U.S. market, the world's largest.
EBayClassifieds will bring the full weight of the well-known e-commerce brand to the table, signaling eBay's intention to dominate in the United States.
It's game-on between Craigslist and eBay, said BGC Partners analyst Colin Gillis. It's the difference between having a subsidiary trial brand versus leveraging the big brand.
EBay also said on Tuesday it had launched mobile applications for Apple Inc's iPhone for the newly branded classifieds site, as well as an updated version for its global marketplaces site that allows selling. An earlier version only allowed buying on the marketplaces site.
News of the rebranding of Kijiji was buried in a press release about the new mobile applications.
Kijiji, which debuted in the United States in 2007 after becoming the No. 1 site in Canada, was viewed as eBay's challenger to Craigslist, the privately owned local classifieds site where consumers can find apartments, jobs, or clear out the contents of their garages.
Two years ago, company executives at eBay projected that its classifieds businesses, including Kijiji and new acquisitions, could take the top spot from Craigslist within three to five years.
But Kijiji, which was cast as a more family-friendly alternative to Craigslist, struggled to find an audience in the United States.
Kijiji was nowhere, said Gillis, who listed the problems facing the site: Not visited, hard to pronounce, not Craigslist, no compelling offering. Is that enough?
The new eBayClassifieds site includes a redesigned website, with improved features related to trust and safety, customer service and user experience, the company said.
But rebranding using the eBay name, albeit potentially more powerful, also carried more risk, Gillis added, especially as the company undergoes a turnaround to revive its flagging marketplaces unit.
EBay's classifieds business is the fastest-growing unit within marketplaces, where sellers connect with buyers.
If it becomes a disaster it becomes a disaster for the eBay brand, said Gillis.
The eBay brand has many positives behind it, but it also has negatives, he said, listing safety concerns of buyers and seller defections to sites like Amazon.com Inc. Now they're putting that brand, which still has tremendous value, at risk.
Shares of eBay fell 0.66 percent to $27.10 on Nasdaq at mid-afternoon.
(Reporting by Alexandria Sage; Editing by Richard Chang)