The Internet was initially created as a cross-platform, free knowledge-sharing tool. It's development was intended to be collaborative and a for the people, by the people type of thing. That changed because big business got involved and saw potential to convert what was free into what costs money. Craigslist was born out of a backlash against this approach to the World Wide Web. For this reason alone, eBay will not succeed.
Put simply, eBay preceded Craigslist. It was all the rage until people realized that it didn't have to be so complicated to connect with people who live near enough to come by and pick up your stuff from you. Craig always cared far less if there is money to be made, and far more about creating local networks to bring humanity back to the web.
Where eBay is a bit of a dehumanizing experience requiring almost a college degree to make the most of it, Craigslist is nothing more than a tool that is more immediate and less costly than placing an ad in the local paper. In order for eBay to truly compete they would have to get rid of a large portion of their overhead and completely rework their entire foundation. The two forums are built based on opposing ideologies and the only way that they might go head to head is in the arena of marketing.
In fact, the two sit on opposite sides of the Internet. It is a bit like comparing the far Right to the far Left. Both are 'isms but, and ultimately both get the job done. But, depending on where you sit on the issue one tool may be more suitable than the other. There are definite benefits associated with eBay. It is not a giant for nothing. But, any attempt they may make to take over Craigslist would be for one reason and one reason only: to shut it down.
The biggest threat to eBay is their eroding customer base. But, it is unlikely that people with stop using eBay. Instead, there will likely form a division of classes. Probably people wanting to reach a wider audience or sell more premium or rare goods will remain on eBay. In truth, eBay has much larger fish to fry. There are a number of copycat services out there such as bing.com, and even things like priceline.com.
There are some very good reasons for why eBay should be paying more attention to online auction sites serving commercial clients instead of worrying about public garage sale sites like Craigslist: There are already a large amount of businesses selling their goods through eBay. For some, this is like an extension of their online store while others use it as a way to get rid of overstock. But, more importantly, the value of the goods is larger and being new, attract more visitors. This alone is worth billions in online ad revenue.
