What would you do? Or turning a website into a business.

A couple months ago I was approached by a good friend (we will call him Sam) who was taking a job with a large company with strict IP rules. Sam owned a free classifieds website that he had been maintaining for years but he needed to get rid of it due to the IP rules at his new company. So I purchased it in full for a very nominal amount of money.

The site is located at http://www.frimp.net and it currently has 5k registered users, 17000 postings and 25-30k hits per month. The current operational costs are about 45.00 per month. It is not stellar but I was thinking it was better than starting from scratch.

Does the community at large have any words of advice or suggestions on how to turn this web site into something valuable?

It is written in Java/Spring and I am about 75% through with a rewrite of the existing functionality in python/django.

Any help will be very much appreciated.