Craigslist has outlasted its challengers, and remains the platform to beat for classifieds, or “things to sell” marketplaces. eBay, similarly, remains a leader for the sale of goods – although most are not geographically oriented. Amazon is also active in that space.

Can Facebook, with its huge volume and trust networks, cut into their business? It is going to try via a new “For Sale” offering that allow users of its groups to post items for sale. Items are listed with prices, photos, descriptions, pick-up location and prices. They can also be listed as “available” or “sold” to let buyers know what’s still on the market/

The listings are currently free — and probably won’t go into the paid areas that provide the bulk of Craigslist’s revenue: apartments, cars, jobs and “personal services.” But if Facebook decides to provide a greater emphasis on classifieds, it could conceivably move into transactions (and commissions). It could also open the service up beyond its groups to have more of a geo-orientation.

It isn’t the first time that Facebook has been used for classifieds. Oodle, a large classifieds platform that launched in 2005, took over a nascent Facebook classifieds service in 2008 and focused on Facebook’s huge scale to offer items for sale to friends and groups within the service. Oodle was sold to QVC several years ago.

It also isn’t the first time that online groups have been used for classifieds. In their heydays, Yahoo Groups and Big Tent — each with hundreds of thousands of users — had active lists of classifieds. Many associations and groups currently host classifieds on their websites and pages.

The classifieds project is the latest transaction-oriented effort from Facebook, which may want to diversify its revenue beyond advertising. Facebook has been experimenting with various transaction models for several years, including tests with virtual gift cards, deals and virtual currencies. Facebook has also developed an Amazon-like capability to enable transactions on other sites by collecting credit card information on its profiles.

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What does a newspaper company do when it loses its affiliation with a major vertical brand? That was the question for The San Jose Mercury News and some of the other Digital First Media papers on New Years Day, when the company’s partnership with Cars.com ended.

The Digital First newspapers knew that most car dealers wouldn’t want to abandon an existing relationship with a partner like Cars.com, a major source of leads and online presence. The answer? Change the value proposition that local car dealers had with the newspaper. For instance, it could complement the Cars.com relationship by developing a service agency-like model. Specifically,it could track where the dealers’ leads came from, and provide actionable information about these active car shoppers.

To this end, Digital First signed up with Cupertino-based TapClassifieds, and its growing, 15 person TapClassifieds Auto division. As part of its program, TapClassifieds evaluates websites, landing pages, text emails and credit applications as they come in. It also clean ups a dealer’s inventory to make landing pages more aesthetic, and to track results.

Tracking dealer results from Craig’s List — a major channel for dealer visibility and source of leads — has proved especially important. The site switched to a premium classifieds model Dec. 3, killing a dealer’s ability to “spam” the site — along with a dealer’s rivals. Consequently, dealers needed to review their efforts on Craig’s List, and pursue alternatives.

Another major task for TapClassifieds: make sure that listings on sites like Craig’s List and eBay Motors are compliant with their regulations. They must remain compliant with the site’s terms of use or see their accounts shuttered without warning or recourse.

“It’s a far cry from the old days, when people would just want to see inventory,” said TapClassifieds COO Jeff Herr, a longtime digital newspaper vet who left MediaNews Group two years ago to join the startup. “There are many, many tasks that you need to do to support the dealer. We are a service bureau.” Pricing for the service runs $15 per month per car, adds Herr.

Digital First has been testing the model with Bay Area auto dealers, and it has now announced a strategic partnership to take the program across all of its markets. DFM properties in Philadelphia, Connecticut, Texas and New Mexico are already up and running.

For TapClassifieds, Herr says that autos are the tip of the iceberg. RV Dealers, real estate and vacation rentals will each launch soon. “Real estate is unplowed Earth,” he notes.

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Craig’s List is going to begin charging used car dealers $5 for 30 day placements, beginning December 3. The new fee is the latest stage in the slow evolution of Craig’s List to a partially premium site that still offers free services to individuals while charging lower-than-market rates to commercial enterprises.

The classifieds leader, which serves 486 U.S. markets and 214 overseas markets, imposed $5 fees on event tickets last year. It previously imposed $10 fees on “therapeutic” ads for sex workers and others; $10 fees for apartment listers in New York; and in some markets, $25 for recruitment ads (but $75 in San Francisco). Most of Craig’s List revenues are earned in its top 28 markets — it remains a steadfastly urban site — and the vast majority of its revenue comes from the recruitment ads.

According to tallies by AIM Group, Craig’s List currently has 3.9 million auto ads in its top 28 markets. Some of its markets (i.e. Dallas, Miami, Houston, Seattle and Phoenix) are clearly more car-centric than others .

The AIM Group suggests that just 10-15 percent of the sites used car ads might be dealer ads. Based on that estimate, we’d calculate that such ads might bring $1.95 million to $2.925 million per month, or roughly $23.4 million to $35.1 million per year. Smaller markets might bring in another 5 percent .

In our view, the imposition of dealer fees for used cars are mostly a good thing. They will likely end the surfeit of “fake” car ads designed to get consumers to the dealer. They’ll also make the ads easier to manage, as dealers currently post (and repost) ads in an effort to stay on top of the listings with high volumes of ads. The repostings have hurt Craig’s List efficiency, as the same Honda Accord EX 2013 would come up multiple times in user searchers. The imposition of apartment fees in New York similarly were something of a public service for all involved.

The downside for auto dealers is they still need to do a credit card payment for each listing, car by car. Industry analysts, however, suggests that Craig’s List might be developing a bulk signup program.

One question we have is whether the auto fees precede a similar program for real estate. Craig’s List has been aggressively blocking both auto and real estate hyperlinking to prevent third party sites from piggybacking its content.

Another question we have is the competitive threat posed by Craig’s List to car sites and other vertical sites. We have seen a growing use of Craig’s List by various vertical players (apartment managers etc.). We believe that the auto community is less vulnerable than other verticals, however, given the sophisticated search, tech and content features provided by leading auto sites.

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Craigslist has been taking a beating from law enforcement officials over its adult ads and other subjects, but Newmark says that the complaints are not really making much of an impact. “People like to manufacture controversy,” he says. But Craigslist remains both “a business and a community service.”

In fact, the service has generally made strides in most areas, thanks in part to the addition of more customer service employees. The service now has 35 employees.

The most complaints are in New York, due to abuses of apartment listings. But “there has been a big improvement. It is better than it was five years ago,” says Newmark, who also answered personal questions and discussed government issues. In answer to an audience question, he noted that he did not find his girl friend on Craigslist. He also says that a pre-nup between them is the “subject of negotiation.”

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Craigslist has always been murky about revenues, and remains a free site for most categories. It only charges a commercial rate for recruitment, with listings costing just $25 in 17 markets and $75 in San Francisco. Fees for apartment listings (in New York) and “adult and therapeutic services” ads fit into the nominal fee category, assessed mainly to track who is advertising and to limit ad spam.

Indeed, site leaders Jim Buckmaster and Craig Newmark have made a big point of saying they have enough money and don’t need to pump up the revenue machine — much to the frustration of eBay, which owns about 20 percent of the site.

But even with its modest feel levels, and mostly free status, the reality is that Craigslist is actually beginning to make real money, according to a new report and forecast by the AIM Group. AIM says Craigslist is poised to earn $122 million in 2010, with profits between $88 million and $99 million.

Recruitment accounts for more than half the site’s revenue, and roughly 17 percent comes from the New York-only apartment fees, says AIM. The big surprise is the projection for sex ads, which will bring in 30 percent of the gross. AIM notes that represents three times its projections for Craigslist sex ads in 2009.

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