Fascinating stuff sparked by the eBay/Craigslist deal from Safa Rashtchy at Piper Jaffray in his Silk Road Newsletter:
We note that the large metropolitan areas such as New York or San Francisco have most likely just as much variety of merchants and offerings as you can find online. Searching and finding these merchants, however, is extremely inefficient and nearly impossible (the yellow pages is only efficient for broad categories, while consumers tend to search on a product basis). Thus, a consumer looking for a treadmill may well find the best offering right in his or her neighborhood, if such local business can have the same access to the web as the online business have had so far. In short, we believe we could be seeing an eBay-like phenomenon in the local listings, allowing consumers to easily find and transact with the local business (or other consumers, as Craig’s List provides) through an efficient online platform. How much could this impact Amazon, eBay, or other online merchant’s sales is not clear to us but we will be watching this trend carefully in the coming quarters.