07 December 2009 | Author: O. Gaywood Media Optimiser

Craigslist and eBay go to court

A court case involving Craigslist and eBay is underway in Delaware following claims by eBay that the defendant is deliberately trying to diminish its minority ownership in Craigslist.

In 2004 eBay bought a large stake in Craigslist from one of the website's early stakeholders. Since then eBay feels that Craigslist executives have gone out of their way to reduce its shares and to block its attempt to get a seat on the board.

At the time of the deal, Craigslist welcome the investment on the proviso that eBay stuck to their statement that they would not interfere in decision making. However, since then the auction site has lobbied for a seat on the Craigslist board, a step that has been denied by what it claims is secret deals made by Craigslist chief executive Jim Buckmaster and founder Craig Newmark to dilute eBay's shareholding from 28.4% to below 25%, the mark needed for a board-level position.

Since buying into Craigslist, eBay has created its own classified website - Kijiji - which upset Craigslist, causing them to file a lawsuit claiming the larger company had used inside information to create this competing site.

The ruling of the current court case could shape the future of Craigslist. If it goes in eBay's favour, it could give the auction site more say in the running of Craigslist - the classifieds site currently only charges for listings in a small number of categories which could be one of the things to change. Whether Craigslist is strong enough to cope with increased charges for its users or if they'll all go flocking elsewhere - like Kijiji - is yet to be seen. If Craigslist gets its preferred ruling then the San Francisco-based website will be looking to secure its business model.

Home | Careers | RSS | Contact Us | Newsletter

International sites: