OLX aspires to become the leading free local classified site on a global level. The company was created in March 2006, the site launch announced on this blog on April 1, 2006 and we started marketing it in May 2006.

It is still early days, but the early results are encouraging. The site already has over 8,000 listings on a global level, gets 2,000 replies per month and did 3 million page views in May. Traffic is growing nicely as can be seen on the Alexa chart below:

We are seemingly successful in creating some liquidity, but a lot of work remains to be done – on a local level there are still very few listings and still have very little organic traffic. It’s unclear whether all the features we have added have made a meaningful difference for users. Outside the U.S., traffic, while cheaper to obtain, does not convert to postings and replies as effectively – maybe because people are not used to classifieds.

It’s interesting that the main problem we have encountered to date has been spam – both in the listings and the replies to the listings. We’ve had to implement numerous counter measures to limit spam. This creates an interesting dilemma because we want to keep the site as simple as possible – and yet limit spam…

In the coming days we will release the beta version of the mobile version – people will be able to visit OLX by entering olx.com on their phone browser, we will add video support and poll users on potential new designs.

We’ll see how it goes – fingers crossed!

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  • As a temporary measure, you could just use your extra gmail invites to set up accounts that you can forward the mail to and pull back down using the pop3 feature and get the spam filtered out there. This would be invisibile to OLX users, of course. In my experience gmail spam filtering outclasses everything else by several classes, and I think it has something to do with the fact that google has the luxury of cross examining millions of email accounts do see patterns indicating what is and isn’t spam. I get a hundred spam a day in my gmail spam folder, but I never have to see it, because my actual inbox only gets spam once every couple days. Without the far reaching ability to examine people’s email accounts (Big Brother is your friend in this case!), I don’t think another party can match the spam filtering precision of Gmail/Google, so looking for a good alternative is going to be tough.

  • I just want to clarify: Although many other mail providers (MSN, yahoo) etc may have many mail accounts to examine, it is Google’s search technology that allows them to harvest spam related information and translate that into precise spam filtering. If you need proof of that, compare Hotmail’s 1/2 false negative hit ratio to Gmail’s 1/200 flase negative hit ratio.

    Ok, ok, for full disclosure, i do have some Google stock, but it isn’t a lot. At least, not enough to think that a blog reply is going to bump up my equity.

  • you mentioned the marketing started in May. also curious how much marketing money did you put in to get this result and what are different type of marketing you used and what’s the most effective one?

  • Where we advertise and how we advertise is part of our secret sauce. All I can tell you is track every single ad you put on every single ad to get the actual cost of acquiring an active user (in our case a user replying to an ad or posting an ad) and keep optimizing and trying different creatives, sites, keywords, etc. on a regular basis. Keep iterating!

  • That’s nice to have the open thoughts of a serial entrepreneur on its new ventures, it’s a quite different way of working than many.

    Fabrice, what do you think of ebay’s latest launch of adsense-like service, where thematic websites get ads from ebay that are basically items on auction at ebay?

    also… does ebay have a mobile service… and what do you think of it..?

    Alright, let me be straight, isn’t it huge than to try to take on ebay?

  • Ben,

    I am not really taking on eBay. We are a classified site. It so happens that I think that auctions are a subcategory of the For Sale category in classifieds (a sub-section of the market) and that eBay can’t compete with our business model. But at the end of the day, we are really more competitve with Craigslist than eBay.

    As for them launching their ad network – that makes a lot of sense – eBay has felt too dependent on Google for a long time. It’s going to be interesting to see if a CPA network can be as effective as a CPC network. I understand the appeal as an advertiser. Unclear as a publisher…

  • Fabrice,

    yes, you’re right, Craiglist is closer to what you do… but not a small player 🙂

    If you include bloggers into the publisher list, then my interactions with popular, major bloggers and as in the book of Loic Le Meur on blogs, they seem to all say that selling items like books, etc, basically referring to items-for-sale from Amazon is a much more lucrative business that Google Ads… They get a cut of a product (book, software, whatever) rather than a small cut out of a click value for directing someone to a website..
    However, that might not apply to other type of publishers or I may have missed something..

  • It seems like you guys are trying to offer local classifieds on a global level – but with a new twist. Great to hear there is innovation happening in the “online market” arena!

    I can imagine that there are a few other “twists” you could give to OLX, mainly on the “Web 2.0” front, and I’m going to share one potential twist: social networks.

    You mention above that people in some countries might not be used to buying something through an online classified. You know what? That’s probably true! However, what’s definitely true is that people are used to buying stuff from friends – and from friends of friends. I think there might be an interesting opportunity there.

    So, how about adding the capability of finding products/services that are for sale within your personal network? LinkedIn has done that for JOBs, but I imagine that the same could be done for anything else.

    Now, the question is: should OLX develop their own proprietary “social network” or should you guys partner up with LinkedIn, MySpace, Friendster, Orkut, Hi5, or any of the many social networks that have mushroomed over the past few years?

    One way I could envision the latter is the following (if, of course, you’ve figure out the partnership & technical details!):

    When you sign up to use OLX, in your user profile you would let OLX know in which “social networks” you have a profile and under which usernames/passwords. So, when you do a search for a product/service, the results would also include how many degrees of separation you have from the listed product/service.

    The feasability of this is uncertain, both on the technical as well as on the strategic alliance aspects – not too mention user adoption – but it does seem like an area that’s worth exploring!

  • Richard,

    Tribe.net tried to do just what you described but failed. When it comes to transactions as a seller you want as many buyers as possible to make sure you sell what you have and as a buyer you want as many sellers as possible to make sure you find the item you want. By limiting transactions to a social circle, you ended up limiting liquidity. Maybe the idea might resonate better in developing countries.

    I like your second idea a lot more, though I don’t think many people will trust us (or anyone) enough to entrust their user id and password on various social networking sites.

    My current solution, which is still in development, is to offer users an OLX badge that they can insert in their blog and/or social networking sites so they can advertise to their friends their listings on OLX.

    I am also thinking of adding Rapleaf to the site – the site neutral rating system…

  • Ben: We are going to try and see. My instinct is that selling advertising to people who list items on our site so they get featured or premium placement is the best way to go, but we will build it after we have critical mass.

  • Fabrice, you raise some good points about the complexity of implementing a “social network” aspect to OLX.

    I would see this not as mandatory information, but rather as optional information an OLX user includes, whether the user is a buyer or seller. In some cases, it wouldn’t be a big deal if the user included that info, but I imagine that in others – for example, if you’re looking for a roommate or a new hire – that information is quite useful and a buyer could potentially favor a seller who is in the buyer’s extended network.

    I’m thinking out loud here, but maybe you could make deals with the different networking sites for the different sections of OLX – in other words, pursue vertical solutions. Case in point: for the jobs section, you would incorporate LinkedIn; for potential roommate section, maybe MySpace or Friendster; for the dating/casual encounter section, maybe True or Match; etc etc

    Of course, maybe all this is overkill – specially now that you guys are taking your first steps!

  • Hi Fabrice
    You mention that the main problem you have encountered to date has been spam – both in the listings and the replies to the listings, as this is a big NO NO in the “Terms of Use” I´m interested to know if you are able to pursue and fine the culprits, and thereby limiting or minimizing some of the spam?