eBay’s dirty laundry…I think it would benefit you to know a bit more about eBay and Craigslist.org . I like Craigslist for many reasons. FREE listings and great way to generate immediate traffic to your listings or postings.

On April 22^nd Craigslist released the following statement:

“Ebay has filed suit against craigslist and its board of directors:

http://news.ebay.com/releasedetail.cfm?ReleaseID=305980

We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us.

Coming from a shareholder that views craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives.

Ensuring the future well-being of craigslist and the craigslist community is admittedly very important to us. But Ebay has absolutely no reason to feel threatened here — unless of course they’re contemplating a hostile takeover of craigslist, or the sale of Ebay’s stake in craigslist to an unfriendly party. (In which case, they’re out of luck.

For our part, we have always treated Ebay very fairly as a minority shareholder, and plan to continue doing so, despite this unfortunate development.

Addendum in response to commenter question – To be perfectly clear, Ebay’s stake in craigslist has not been “unfairly diluted” as they have claimed.”

Ebay claims to be safeguarding their investment. For all of us following Craigslist and eBay, it is no secret that eBay has been trying to gain popularity on their Free Classifieds in Kijiji.com

While eBay’s attempt to bring down Craigslist has been unsuccessful ; eBay has not resorted to the lawsuit. Here is a link to the coverage by MSNBC

How did eBay acquire the stock? Former employee sold it to eBay. Craigslist had no Clause at that time regarding stock being offered to the company first.

Craigslist followed up the story on 4/30/2008 with the following statement:

“The public version of Ebay’s claims is now available.

We will file our formal response in the next few weeks, and until then will do our best to abide by protocol in not responding to specific assertions made in Ebay’s complaint.

As those who know us best will recognize, every measure we have taken has been for the sake of protecting the long term well-being of the craigslist community.

Sadly, we have an uncomfortably conflicted shareholder in our midst, one that is obsessed with dominating online classifieds for the purpose of maximizing its own profits.

It’s a conflict of interest worth keeping in mind if you decide to give this filing a read.”

On 5/13/2008 Craigslist announced to have filed the following:

“We filed a complaint in California today, charging eBay with unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.

Full text of complaint is available in PDF or HTML”

The claim also outlines how eBay was running Ads using Craigslist.org as a headline to benefit and drive traffic to their site Kijiji.com

So why did I post this story now? Well, I check on the Paypal’s site regularly for updates and changes that may affect sellers or the industry. I noticed something strange; Paypal’s footer has a link to Craigslist.

This sparked my curiosity and I checked on Craigslist’s Blog and no mention of changes in ownership or changes in control.

Of course, eBay owns 25% of Craigslist stock and perhaps that explain all the changes Craigslist has made to their sites. Such as:

1. Mandatory Registration

2. Mandatory phone verification

3. Divide categories

I have not found any updates on the case. I will certainly post updates as they unfold.

Popularity: 4% [?]

Related posts:

1. eBay Post Clarification Regarding Third Party Checkout If you follow Auction Bytes you might have read the...
2. “Bill Me Later” on eBay for select Sellers and Buyers “Bill Me Later” on eBay for select Sellers and Buyers...
3. Selling on eBay Questions & Answers I have received many emails with many of the questions...

Related posts brought to you by Yet Another Related Posts Plugin.