eBay sues Craigslist

The online auction giant eBay is suing the popular internet community ad site Craigslist to "safeguard its four-year financial investment". In a statement, eBay claimed that in January, Craigslist executives took actions that "unfairly diluted eBay's economic interest by more than 10%". No details of those actions were given by eBay.

In its company blog, Craigslist said it was surprised and disappointed by eBay's "unfounded allegations". The company said eBay's legal action "came to us out of the blue".

The case, which is sealed, has been filed in a court in Delaware, where Craigslist is registered. In a press statement, eBay claims that Craigslist's founder Craig Newmark and its chief executive Jim Buckmaster adopted unspecified measures in January that have disadvantaged eBay and its investment. eBay's general counsel Mike Jacobson said: "Since negotiating our investment with Craigslist's board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. He continues: "We are asking the Delaware court to rescind these recent actions in order to protect eBay's stockholders and preserve our investment."

Craigslist, the seventh most popular English-language page on the Web, hit back in a blog. "We have always treated eBay fairly as a minority shareholder, and plan to continue doing so, despite this unfortunate development," it said. "eBay has absolutely no reason to feel threatened - unless a hostile takeover of Craigslist, or the sale of eBay's stake in Craigslist to an unfriendly party, is their ultimate goal."

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27 Comments

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All the buyers go to ebay because all the sellers are there, and all the sellers are there because all the buyers are. It's a horrible cycle, and ebay gets more powerful every day because of it. If a new auction site would just come along and offer enough incentives to get all the good sellers from eBay the buyers would follow. Unfortunately it would be like that Wal-Mart episode of South Park where once the little store became popular it became just as greedy and corrupt as the one they burned down.

The problem with eBay is that it is so unpredictable and unreliable. After not selling my Nikon D50 on craig's list after two weeks, I listed it on eBay. The guy who "won" it never paid, and the second highest was about $250, while the camera was selling for $350-400 on average at other times.

Lucky for me, I found a buyer on Craig's List who paid $350 for it, and no fee's to boot.

On the other hand, there have been a few auctions I have lost on eBay, and the winners paid MORE then retail prices on the items. It makes no sense sometimes.

Surely 'diluting Ebays investment' (lol) just means that Craiglist provided competition that means Ebay no longer has a monopoly.

Google is the only one who could actually dominate Ebay if they had ever set up their rumored auction site.

eBay is getting greedy, their fees are atronomical, Besides I get much better and faster results seeling my stuff on Craigslist than I do with eBay.

The new CEO needs enough $100 bills to stuff a new mattress nightly. If he has to sleep on the same one two nights in a row he gets moody.

eBay sucks! Craigslist ftw...you basically pay eBay to have problems these days, it was good at one point of time.

It's probably because CL basically doesn't even allow references to eBay auctions. Doesn't matter since CraigsList is full of the same spam and scam that eBay is now. This only explains why...

To dilute ebays interestes? is this code for we lost 10% of our users now we want money because we wern't allowed to slowy turn craigslist into ebay

Unfortunately, eBay is all but a complete monopoly and something must be done. I really hope craigslist can counter-sue or something. eBay is getting out of hand with their fees.

eBay, can we act any more immature?
Your fees suck; there is a reason many of us don't use you anymore!

Well, according to the wikipedia entry on craigslist, eBay invested in a 25% share of craigslist. At that point, they are a significant investor, and perhaps even a partner in the site.

If they feel that their investment has been mis-managed or such, they are in the right to try to settle this manner.

It sucks to be a dissenting opinion on the "screw the big guys" wave that is washing over this news article, but looking at it objectively, eBay may have a legitimate issue.

The action may be well founded and legitimate but I don't like the implications.

Investing in a company should not prevent it from competing in the market place. eBay is obviously a major rival and as a powerful company it should not be able to buy in and effectively stop Craigslist from actions that will increase its market share. That's like Coke buying into Pepsi and then suing if Pepsi takes action to increase its market share - it may be legitimate action but it's bad for the market.

(theyarecomingforyou said @ #2.3)
...
That's like Coke buying into Pepsi and then suing if Pepsi takes action to increase its market share - it may be legitimate action but it's bad for the market.
If Pepsi was stupid enough to let an entity invest with specific terms on the investment (and possibly returns on said investment), well... it would be their own darned fault for being naive or stupid like that.

I don't know what terms the eBay investment was under. It if was a "no strings attached" donation (which I doubt), or if there were terms on what craigslist could do and not do. I am going to guess the latter.

(markjensen said @ #2.4)
I don't know what terms the eBay investment was under. It if was a "no strings attached" donation (which I doubt), or if there were terms on what craigslist could do and not do. I am going to guess the latter. ;)

EBay acquired its stake from a former Craigslist executive who was seeking to sell his shares. Mr. Newmark and the Craigslist CEO Jim Buckmaster said in separate messages posted on the Web that they never imagined a stake in Craigslist ending up in the hands of a publicly-traded company. Still, the former Craigslist executive made it clear to the company that he intended to sell his shares and began approaching other parties, including eBay.

Messrs. Newmark and Buckmaster said they warmed to the idea of eBay buying the former executive's stake after eBay executives made it clear they wouldn't ask it to alter its mission. "They have no interest in asking us to change that in anyway," Mr. Buckmaster said in an interview. "They're happy with us having our full autonomy. They recognize us as experts at what we do."

http://www.craigslist.org/about/press/ebay.stake.html

(Tha Bloo Monkee said @ #1.3)
I just checked it out, it's basically like Kijiji (online classified). The website is very ugly and plain tho.. looks like something from 1998.


That's because ebay made kijiji to be in competition with craigslist.