The Biggest Threat To eBay, Etsy And Craigslist Is Here

According to recent reports, Facebook Inc FB is working on launching an online marketplace and it is already testing the feature in Sydney and Auckland.

Ben Rubin, reporter at CNET, was on CNBC recently to reveal details about this new feature and how it can, over time, become a threat to other online marketplaces and classifieds like eBay Inc EBAY, Etsy Inc (NASDAQ: ETSY and Craigslist, Inc.

The Feature

"So, people have been buying and selling on Facebook groups for quite a few years now," Rubin began. "But it looks like Facebook is now at least trying to formalize the process by creating these consumer-to-consumer marketplaces in two cities in Australia. So, right now it's very small, it looks like they are just piloting it."

Potential Threat To Others

On whether potential competitors should be concerned, Rubin said, "Yeah, absolutely. I think, Facebook groups has already been a bit of a problem for Craigslist, to begin with. If this ends up catching on at all, it could be a big deal for eBay seeing how eBay has already been struggling quite a bit to increase its revenue and has been kind of lagging as far as e-commerce is concerned."

Related Link: Wall Street's Top Pros Dissect Facebook's Earnings

Will Expand Launch If Pilot Is Successful

Rubin was asked if he thinks Facebook will roll out this feature in other regions. He replied, "I think, if it's successful they absolutely will do that. Facebook obviously knows that people do a lot of buying and selling and bartering through Facebook groups already.

"To me it seems like, it's fairly safe and fairly reasonable to allow people to do this without much of a formal process, because Facebook has these logins where you have to actually know that it's the person that you are dealing with. It's a little bit more of a secure login as opposed to Craigslist where it's more anonymized," Rubin said.