The ‘virtual halo’ that once made Craigslist so popular is all but gone, according to US interactive media and classified advertising consultancy AIM Group.

It says that while revenue and profits resumed their steady growth in 2012 after a slight one-year dip – according to new estimates – the major classifieds site faces major challenges ahead.

In a new report released today, the AIM Group projects revenue at the San Francisco  based site increased to 9.7 percent in 2012 to $126 million, with profits of up to $103 million, or 81.7 per cent. The report details revenue and listings in 19 markets, and extensively covers recent changes at Craigslist and litigation involving the company. The ‘virtual halo’ that once made it such a popular site is gone.

AIM Group founding principal and editor of the report Peter Zollman says that even though revenue and profits are up, the “amazing goodwill and sense of trust the site had for so many years” has been damaged.

Apart from pending lawsuits, new competitors are eating into its dominance while mobile usability is seen as an issue. “Craigslist is facing more difficult problems than ever before,” he says.

The 171-page report, ‘2012 Global classifieds annual’, outlines a battle for dominance of classifieds worldwide by four companies: Craigslist, eBay, Naspers and Schibsted.

It profiles more than 150 emerging or expanding classified sites worldwide, with detailed analyses of 33 countries. The report includes 28 charts, including a six-page overview of the brands and countries covered by the ‘big four’ sites and a two-page city-by-city analysis of cars, homes and job listings on Craigslist.

eBay, Naspers and Schibsted are competing head-to-head in a number of markets and are growing organically, by acquisition and through aggressive marketing.  But in several countries, including Belgium, Spain and Switzerland, independent sites have managed to take the lead in spite of the efforts of the ‘big four’.

The report details Schibsted’s profitable online classified products, which are returning margins of more than 50 per cent in some markets, and its expansion into China. Naspers, which has significant investments in China and Russia, has grown through recent acquisitions but still takes in just a small percentage of its overall revenue from online classifieds. And eBay continues to expand in the classified field, and is dominant in a number of markets including the Netherlands.

“This is our largest and most comprehensive report on the global classified advertising industry in the 15-year history of Classified Intelligence Report,” Zollman says. “Our global analysts interviewed dozens of key decision makers and collected a wide range of statistical data to provide insights and ideas our clients can apply to their own business models.”

For more details or a free preview, visit the AIM website.