Work has been quite hectic the past few weeks so I've gotten behind on checking out the sexy new startups coming out of Silicon Valley. The startup that has recently caught my interest is Edgeio, the brain child of Mike Arrington of TechCrunch.

The most succint post I've found on the company is Edgeio - Mike’s Little eBay Killer by Pete Cashmore where he writes

Essentially, Edgeio is an aggregator for classified listings. You can write a classified ad on your blog, tag it with "listing" and let Edgeio pick it up from your feed. Add a few more tags to describe your ad and Edgeio will grab those too. The service will pick up anything tagged with "listing" and obviously that raises the question of spam. But after speaking to Mike, I’m pretty sure he’s on top of it. For instance, you can claim your blog on Edgeio, just like on Technorati. Claiming your blog means that you are now a "member" and your listings are considered more trustworthy. There are also automated ways to remove the worst of the spam. And then there are the user-powered methods - "report spam" buttons and the like.
Last of all: the business model. Unlike about 90% of the stuff that gets labelled (tagged?) Web 2.0, Edgeio actually has one. Actually it has a few, but the main monetization method appears to be sponsored listings - pay 25 cents a day to get your listing bumped up to the top. I would have been tempted to pursue a transaction-based model (ie. you take a cut from every sale), but I can see why Edgeio isn’t taking that path for now - handling transactions is a huge job and requires a reputation system, among other things. (And if Edgeio did build a reputation system, I’m pretty sure it would be portable).

Calling Edgeio an eBay killer is probably a bit hyperbolic, but I do think it points the way to how decentralization will undermine the centralized business models of old. Your little walled garden will never be as large, rich and varied as the content that exists out on the open web.

As you can expect from a "Web 2.0 blog", Pete Cashmore's post is full of hyperbole and leaps of faith but there are some interesting ideas here nonetheless. From a technology perspective I assume that Edgeio depends on microformats just like other metadata-in-your-blog-post initiatives such as Structured Blogging. This indicates to me that there now seems to be general consensus amongst the Silicon Valley startup crowd that building a company based on searching blogs and screen scraping their HTML such as PubSub and Technorati have done is the new hotness.

The more interesting thing to me is that the folks at Edgeio are implying that there is a market for a 'Make this blog post a classified listing' checkbox in traditional blog posting tools. From my perspective as someone who works closely with the MSN Spaces and Windows Live Expo teams this sounds very interesting. There is already some integration planned between both services but I'm not sure this is one of the options that was considered. I wonder how much user validation of this beilief Mike Arrington and company did before going ahead with launching their startup?

As far as business models go, I find it hard to imagine why anyone would consider this an eBay killer. I'm not going to claim that people posting things for sale on their blog and then having that picked up by classified listing services is inferior to eBay's model. However, I wonder why anyone thinks that services like eBay, Craig's List and Windows Live Expo wouldn't jump into this market if it turned out to be profitable. Since there doesn't seem to be any barrier to entry, ability to write a Web crawler and minor HTML parsing is all that is required, I wouldn't start eulogizing  eBay just yet. 


Tuesday, February 14, 2006 1:55:39 AM (GMT Standard Time, UTC+00:00)
Very astute, as usual, Dare. You're right, there doesn't seem to be any barrier to entry with this model. The structured blogging initiative is an exciting one though. We'll have to do a wait-see on Edgeio doing something compelling with it (that can't be easily duplicated.)

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