Cheezhead Recruiting News and Opinion

I was a little skeptical about Oodle when it first burst on the scene and its evolution shortly thereafter. In 2006, I said, “From where I sit, Oodle has its work cut out for it. From a simple positioning and branding standpoint, it’s going to be extremely tough for a start-up to stake a claim to the local online classifieds space with the head start Craigslist enjoys.”

Throw in the fact that classifieds king Craigslist banned Oodle from spidering its content, plus the issue of trying to be successful in all-things-classifieds (job search is Oodle’s second most popular category) when there are so many in specific verticals with success via laser-like focus, and the road for Oodle seemed particularly bumpy.

Fast forward today and Oodle seems like the last one laughing. Recent partnerships with MySpace, Facebook and, yes, even Wal-Mart may go down as strokes of genius akin to the partnerships we saw with AOL, MSN and Yahoo! from days of yore.

I chatted with Oodle CEO Craig Donato recently to dig into his company’s partnership strategy, plans for the future and his take on the recent economic downturn. First, Facebook.

“When the opportunity came up for someone to power the Facebook classifieds application, we jumped on it,” said Donato. “They have a real opportunity to change the game in terms of classifieds.”

Donato is optimistic about Oodle’s ability to better socialize classifieds and that partnerships with sites like Facebook, MySpace and Military.com will help facilitate such a future. Donato believes certain aspects of online classifieds as-we-know-it is hindered by a “weirdo factor” in which people are hesitant to connect face-to-face with those they’ve never even seen. Social networking tools, which might enable them to attach a profile to a seller or buyer, can help alleviate such factors.

“Facebook chose Oodle for its track record of innovation with online classifieds,” added Facebook’s director of communications, Brandee Barker. “Oodle will be developing and powering an enhanced version of the Marketplace, which will give users new ways to buy, sell, and share listings with the people they know as well as other users on Facebook.”

Partnership deals currently and typically include revenue generating opportunities in the form of more pageviews for banner advertising as well as upsells for marketplace postings. Oodle also generates money from featured postings in search results.

Interestingly, Donato doesn’t speak in terms of creating a monolithic destination through search engine traffic or traditional marketing. “I don’t believe there’s a winner-takes-all opportunity for any one marketplace,” said Donato. “The Internet wants to be one giant marketplace. And our focus isn’t Oodle.com; it’s the network.” He noted Oodle’s anti-spam infrastructure and scalability as key reasons to their partnership model’s success.

In regards to the future, Donato believes classifieds are a recession-proof business (”if there is such a thing”), with users more motivated to find deals and sell items through online marketplaces. He also believes performance-based models like Oodle’s featured postings will thrive in a recession vs. display models. They are, however, lowering their projections this year from last.

“I think if people have a fixed budget, there’s a limited amount of money they’ll put toward building brand or their visibility in the market, and there’s a certain percentage, they’ll spend on leads to their business,” said Donato. “I think in a tough time when they have to cut that budget, they’ll cut the stuff that generates leads less than they will the other things because it’s directly measurable.”

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