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Monday, August 11, 2003

Net usurps print ads

TRYING to sell an old Beatles record or grandma’s old-fashioned coffee pot often used to be hard work. The seller needed to set up a stand at a flea market or place a small ad in the local paper.

The financial return often did not match the effort. The Internet has changed this. Trading in used items has become easier and often more successful. Items advertised online reach far more potential customers. Auctions mean that buyers bid against each other and push up prices.

While many ideas of the new economy boom have been forgotten, the online market for flea market items or motorcars has shown themselves to be highly successful. This has also wrought changes in the newspaper small-ads business.

Anja Pasquay, of the BDZV newspaper organisation says the industry is aware that the ads on the Internet are easier to deal with. But the newspapers are not simply letting this happen. "They are developing their own Internet market." EBay’s success must look daunting to some media. More than 60 million persons worldwide trade on the largest of all online trading communities — including 12 million in Germany. In Germany a Volksagen car is sold online via eBay every 25 minutes while a vacuum cleaner changes hands every seven minutes. A cellphone is sold via eBay every 30 seconds. The firm’s earnings worldwide in 2002 amounted to $ 1.21 billion. Most of that came from the cost of insertions and advertising. Of that sum, $ 250 million was profit. Ebay spokesman in Germany Joachim Guentert says: "You can take it that more is sold in Germany through eBay than through newspaper ads."

In the fields of cars and furniture, smaller online dealers are doing big business. Portals such as mobile.de or Autoscout each run about three quarters of a million ads. Both reported turnovers up 50 per cent in the past year.

Mobile.de chief Ruediger Bartholatus says the 47,000 motor dealers in Germany managed to do about a quarter of that business.

The area of electronic services is having an effect on newspaper small ads, says Heiner Urhausen, manager of a newspaper association. Printing runs are declining. "It is impossible to say how many ads are disappearing into the Internet."

The economic slump is another reason for the declining business, he said. — DPA