Online auction site eBay has launched an online classifieds site in the US, putting it into competition with Craigslist.

Kijiji will be available in 220 cities across the US, providing listings for a range of products and services free of charge.

The move pits eBay directly against established online classifieds site Craiglist, in which the auction heavyweight owns a 25% stake. It is the classifieds market leader in several countries, including Germany and Italy.

Online classified ads is a growing market, with traffic to the leading US sites increasing by almost 50% in 2006.

Jim Buckmaster of Craigslist is not concerned by the competition:

“Many companies offer classifieds, but since we don’t concern ourselves with considerations such as market share or revenue maximization, we don’t think of them as competition, or as a challenge to Craigslist.”