By John P. Mello Jr.
From Providence Business News, August 27-September 3, 2005
Online classified advertising is expected to reach $4.1 billion by 2010, according to Jupiter Research. That's good news for Vega Interactive. The Providence company, founded by two Ocean State Online veterans, Tom Viall and Linda Woods, has begun carving a niche for itself in the world of wired classifieds with its "ListIt" product, a subscription-based service that emphasizes local over national advertising.
Viall, Vega's managing partner and chief programmer, recently chatted with Providence Business News about Vega and the online classifieds market.
PBN: Why did you start Vega Interactive?
Viall: Linda and I both worked for OSO.com. We ran an extraordinarily successful online classified section. It was probably the first online classified section in Rhode Island where the user could submit their data online. It was the element of the site that users liked the most, so when OSO was closing down, we carried on the classifieds. We wrote an entirely new application just for classifieds based on the customer feedback that we accumulated from OSO.
Then we went and worked with Cox Communications New England. They gave us some branding on their portal product that's offered to broadband users. That allowed us to hit the ground with a really good presence and there was only about a three-month lapse from the time OSO closed down and ListItRI started.
That was important because it allowed us to carry over a lot of those users over to the new product. It got us the amount of listings we needed. With any kind of classified product at all, there's really no reason to go there if there aren't any listings.
PBN: It's been reported that outfits like Google and Yahoo are trying to crack local advertising markets. Why have local markets been such a tough nut to crack for national dot-coms?
Viall: Behemoths like Google and Yahoo can say they want to be local, but what they're really doing is taking a national product, partitioning a portion of it and saying, ‘This is local.' One of the things that we've vowed from the beginning is that even if we replicate the business plans in other markets that we would keep the services really separate and really local.
PBN: You've stated that you have no intention of selling pop-up and pop-under ads on your Web pages. Why?
Viall: It was the No. 1 complaint that we got from users of the OSO product. They hated the pop-ups. They felt they were intrusive.
PBN: Some online classified ad sites – like Craigslist – give their space away. You require advertisers to pay a fee and become members of your site. Does that influence the type of user attracted to your site?
Viall: I don't think so. The major obstacle there is educating people how it works because people are tuned into this idea of paying per ad. The site is free to anyone who wants to give it a try. They can get a free listing on the site to see how it works. Then for those people who have a lot of stuff to sell or they want to use photographs in their ads, they can pay a monthly or yearly fee.
PBN: Do you have any safeguards on the system to protect your customers from online predators?
Viall: Yes. Our biggest ally there is education. At the top of the ListItRI page is a scam alert that gives you information about things to be careful of. We have a great amount of users who self-police the site. And on every single listing there's a "report abuse" link. One of the most frustrating aspects of running this business is that a problem will be coming out of a foreign country trying to scam our users.
PBN: You recently got into the obituary business. What prompted that?
Viall: That's something we worked on directly with channel10.com and WJAR on. At the time, the Providence Journal was making some changes to their obituary business and everyone thought it was a good time for something new to come to the market. So we custom-developed something called obit services. Right now it's exclusively with channel10.com, but it's a project that I think will have a lot of traction because there aren't a lot of companies out there doing it.
PBN: There's a study that estimates the online classifieds on Craigslist's San Francisco operation diverts from $50 million to $65 million away from Bay Area newspapers. Are newspapers threatened by the online world?
Viall: Threaten them to the point of extinction? There's always going to be newspapers. I've worked on the Internet since 1998 and I've heard many times that the Internet was going to kill this or that business. It's not true. Will it cut into one of their central profit points? Absolutely. I'm sure it does. The question is, is there enough to go around? I think the answer is yes.
Published 08/27/2005
Issue 20-20
