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Craigslist Shocked -- Shocked! -- by eBay's Capitalist Motives

Posted May 01, 2008 03:10pm EDT by Aaron Task in Investing, Internet, Venture Capital, M and A, IPOs

Some of the mystery of the eBay-Craigslist lawsuit was cleared up yesterday when eBay published a legal filing accusing Craigslist of illegaly diluting its stake.

Jacob Internet Fund co-manager Darren Chervitz unravels some of the knots in the case in the accompanying video, while a WSJ story suggests that eBay management -- frustrated with Craigslist directors Craig Newmark and Jim Buckmaster failing to capitalize on their company's estimated $5 billion value -- took matters into their own hands. For its part, Craigslist took eBay's launch of classified site Kijiji as a direct competitive threat.

Granted, Craigslist ended up in bed with eBay when the auction site acquired its 28.4% stake via a former Craigslist employee in 2004. But what did Newmark and Buckmaster expect from a publicly traded company whose goal is to maximize shareholder value?

38 Comments

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 03:18PM EDT

It's a good idea.

steven
steven - Thursday May 01, 2008 03:28PM EDT

I like Craig.

Ray
Ray - Thursday May 01, 2008 03:31PM EDT

Ebay is evil.

turbo
turbo - Thursday May 01, 2008 03:34PM EDT

Kijiji? Good luck, eBay.

Mirek
Mirek - Thursday May 01, 2008 03:35PM EDT

I like list.

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 03:41PM EDT

Ebay knew what Craigslist's business model was all about when they acquired their stake from a previous Craigslist shareholder. If they are unhappy with Craigslist continuing to do business as they always have, they need to sell their stake to someone else - not file a lawsuit!!!

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 03:42PM EDT

Craigslist works for me. It is unusual that something so useful should also be free. But to generally fault craigslist on account of spam seems a bit unfair. Take a look at some of the less populated areas that craigslist covers and you will find a sleek, well-oiled machine for moving products and services to an appreciative customer base. The spam referred to in this interview is happening mostly in the population centers where the greedy prefer to gather. Let's hope eBay fails in its mission to hamstring craigslist, who never asked for eBay's attention as a suitor or partner.

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 03:43PM EDT

I support craiglist and truly appreciate and love how Newman has protected the site and effectively all of its users who have come to rely on it.

Gary
Gary - Thursday May 01, 2008 03:43PM EDT

I think the U.S. government should press charges against craigslist for supporting prostitution on its "erotic services" category. Seriously, what craigslist is doing is ILLEGAL!!!

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 03:43PM EDT

I support craiglist and truly appreciate and love how Newman has protected the site and effectively all of its users who have come to rely on it.

Ryan G
Ryan G - Thursday May 01, 2008 03:45PM EDT

Booooooo on eBay. To hell with eBay and all their shady sellers. I've been ripped off twice on eBay, selling fake religious artifacts for 10's of thousands of dollars as reported on 60 minutes about a month ago. eBay is soooo 2004 and i hope it goes down in flames. Boycott eBay!!!!!

john s
john s - Thursday May 01, 2008 03:46PM EDT

I agree 159% with monza96

Doeboy
Doeboy - Thursday May 01, 2008 03:49PM EDT

alls fair in love and war! get yours craig.

David H
David H - Thursday May 01, 2008 03:49PM EDT

Ebay and Google are evil... Did you notice that Google did not do a cool little image for May Day? That’s International Workers' Day… how could Google forget us today… probably to busy filtering content for the CCP!

rc
rc - Thursday May 01, 2008 03:55PM EDT

it's dumb greed... it's like a large restaurant buying 28% share in a free soup kitchen and then getting mad because the soup kitchen is giving the soup away for free... E-BAY is a SCAM and should be shut down. they probably wouldn't be in such a bad position if they didn't try to financially nickel and dime their customers to death.

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 04:00PM EDT

Let's not forget that Craigslist DOES make money, yet at the same time uses a ".org" domain name (.org names are for non-profits only). How do you spell hypocrite?

Michael
Michael - Thursday May 01, 2008 04:02PM EDT

I like 's

just a man
just a man - Thursday May 01, 2008 04:05PM EDT

Aaron you said it, how can you take money and not feel like you owe your investor I don't get it. The funny thing is one day Craig may have his dream job of a customer service rep. manning the phones at E-bay. I don't really understand these socialist minded people.

Yahoo! Finance User
Yahoo! Finance User - Thursday May 01, 2008 04:08PM EDT

Who's better at linking up local buyers and sellers than Craigslist. They seem genuinely concerned with protecting their online community. Sort of a novel and much needed kind of "shareholder value"

Matthew
Matthew - Thursday May 01, 2008 04:12PM EDT

Another typical example of overpaid CEO's trying to rape their own bread and butter clients to make a short term profit , So short sited. If they would have stayed with their original Plan and working for their customers instead of exploiting them they could have had it all . Someoneelse will fill the gap and they will go down , People don't like them .Try Ecrater.com for free. Disappointed businessman

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