The Online Classified Advertising Report: It’s About Search/Find/Obtain (SFO). . .

Online classified advertising is a rapidly growing market
In the US, online classified advertising revenue grew 119% in C2001, to $1.4 billion, while newspaper classified advertising declined 15%, to $17 billion, and total US advertising declined 9%, to $147 billion. We estimate online classifieds are gaining additional share in 2002.

We believe the SFO capabilities of the leading Internet platforms are helping drive online share growth
We believe SFO is the third “killer application” of the Internet. The first was email. The second was the browser. Because of SFO, we believe online classified-related advertising has the potential to encompass a much larger market than offline, owing to its global reach, pricing transparency (which often leads to lower prices), and the ability to consummate transactions instantaneously.

We view Yahoo! and eBay and Monster as key beneficiaries of this shift
As examples, eBay Motors became the largest U.S. pre-owned car vendor in terms of units in C3Q02, by our estimates. Yahoo! Classifieds has robust offerings in help wanted, real estate, and personals. Monster has become one of the largest US employment marketplaces. And categories, such as computers, consumer electronics, and media products (books, movies, etc.) that were small markets offline have proven to be much larger markets online.

Our Internet & PC Applications Software Industry View is Attractive
Given still-strong 20%-plus expected global growth in Internet user and usage, we continue to believe our stocks could outperform the market over the next 12–18 months.


The Online Classified Advertising Report: It’s About Search/Find/Obtain (SFO). . . (101 pages)