This week, eBay announced that it would launch a domestic version of Kijiji, its free classified ads service, which inevitably draws comparisons to Craigslist (25% owned by eBay). The company has a big challenge cut out for itself, particularly considering the loyalty that Craigslist has among its users. But analysts are already excited about Kijiji's potential. In a research note, UBS analyst Benjamin Schachter talked up the potential size of the market and argued that the site could drive usage of PayPal and Skype, as users look for mechanisms to communicate and engage in transactions. Does that sound familiar? It's exactly the same logic behind the Skype acquisition, that usage of it would be boosted by eBay's buyers and sellers. That doesn't seem to have occurred to any significant extent, however. There's nothing wrong with eBay trying to capture a chunk of this market, but any excitement about major profits or synergies seems awfully premature.
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