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London (pte051/25.04.2005/16:30) - London's free classified advertising website Gumtree.com http://www.gumtree.com is set to expand into three more cities, starting with Berlin next month, followed by Rome and Milan in June. As the Media Guardian http://www.mediaguardian.co.uk reports, Gumtree, launched in 2000 by Michael Pennington and Simon Crookall, two former city traders, does not charge for the bulk of its adverts and has a staff of 12 people. After June, it will have extended its reach to 31 cities including Edinburgh, Adelaide, Durban and Paris.
"It has really proved that you can take a classified advertising brand and take it across borders," said Pennington. "I have heard it's childlike, I have heard it's dull, I have heard people say that it looks unprofessional. That's half its charm. Gumtree does not over deliver on looks, it over delivers on content," he added.
In October 2004 Gumtree hosted 75,600 adverts and by last month that had grown to 112,248. Flatshares dominate, followed by for sale and property rental adverts, which are free to post. Only recruitment adverts cost money - 19.95 pounds - but this is still 100 times less than the cost of most newspaper classifieds, which led to Rupert Murdoch labelling a rival's newspaper's classified advertising revenue as "rivers of gold". According to Pennington, prior to February 2003, the site lost between 100,000 to 200,000 pounds a year, but he added that losses have now been reduced.
London is the only Gumtree site that turns a profit and Pennington admitted that if they opened an office in every city to service the company it would quickly go bust. However, he added that this was not necessary. "You can build a local media business with just one person," he said. For the Warsaw site, established as a response to E-Mail requests from users, one Polish-speaking employee sits in the London office sifting through all the adverts before uploading them and then contacting Polish recruitment advertisers in the hope of gathering bookings. The company also makes ten per cent of its revenue from search adverts similar to those that appear on Google, but it does not carry pop-ups or banners.
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