I'm pretty skeptical about this Marketer report that online classified ads are dropping in importance in the online world.  Maybe the online versions of newspaper classifieds are dropping (and having looked at some lately I can see why).  The popularity (explosive, in fact) of CraigsList and Edgeio  shows that online classifieds are more not less popular now.  What remains to be seen is innovative ways to monetize the ads beyond just charging for them.

Edgeio is taking the aggregation route, I think there is room for directed advertising within blogs for ads in your area.  The limitations are really only technological and time (that is the time required for someone to put it all together).

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