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UPDATE 1-Schibsted's sales outlook not threatened by Facebook launch -CFO

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OSLO, Aug 15 (Reuters) - Facebook's launch of its Marketplace e-commerce service in 17 European countries this week hit the shares of classified adds group Schibsted on Tuesday, but the Norwegian company said it was unlikely to affect its sales outlook.

Shares in Schibsted, which has online market sites in 22 countries, fell as much as 10 percent in early trading after Facebook said it would expand its service for connecting local buyers and sellers.

"This is an expected development, it will not change our strategy," Chief Financial Officer Trond Berger told Reuters.

Schibsted holds market-leading positions in local classified advertising websites across Europe including Norway's Finn and France's Leboncoin, and also has fast-growing operations in Asia, Africa and the Americas.

"Facebook's Marketplace has shown little effect on (competitors') growth in the markets it has launched in the past," Berger said.

Schibsted's biggest classified revenue streams come from services such as job adverts, car sales and real estate sales, and less from person-to-person trade in smaller items.

"The generalist market means less to us income-wise, so we are not particularly concerned about our revenue flows," the CFO said. He also said he did not expect an increase in costs to keep up with competition from the social network giant.

Schibsted shares recovered some of their early losses and were down 5 percent at 1316 GMT.

Analysts highlighted the rise in competition and worries over costs.

"Overall, increased competition is negative, but the generalist market is only a minor part of Schibsted's revenues," Danske Bank Markets analyst Martin Stenshall said.

"I think investors worry that Schibsted's response could be to invest even more into its online classifieds to defend its position," he added.

Anders Skoe, chief executive of Schibsted's Norwegian service Finn said Facebook's entry was more likely to expand overall demand than to cannibalise existing players.

About four percent of Finn's revenues comes from the so-called the generalist market, Skoe said.

Facebook's Marketplace is being introduced this week in Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the Netherlands.

Launched 10 months ago, Marketplace charges no fees to buyers or sellers and aims to make it easy for users to trade mostly second-hand goods. (Editing by Terje Solsvik and Jane Merriman)