eBay sues Craigslist: what's the next?

In 2004 eBay Inc acquired 28.4% shares of Craigslist. "In January 2008, however, Newmark and Buckmaster adopted measures that, among other things, unfairly diluted eBay's economic interest in Craigslist by more than 10 percent. By taking these unilateral actions, eBay believes that Newmark and Buckmaster breached their fiduciary duties in violation of Delaware corporate law" says eBay latest press release.

Today eBay is suing Craigslist in the Court of Chancery of the State of Delaware. In order to safeguard its four-year financial investment in craigslist, eBay is going to challenge recent transactions implemented by craigslist's board of directors, consisting of Craig Newmark and Jim Buckmaster.

"The recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist," said Mike Jacobson, eBay Senior Vice President and General Counsel. "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."

The only answer of Craigslist was a mockery entry named "Tainted Love" put up in the company blog. "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" their respond states "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."

According to eBay media release "The complaint is being filed under seal because some of the information about craigslist contained in the complaint is governed by confidentiality restrictions", thus more details on the dispute are to be uncovered later.

Aynny, reporter of Ecommerce Journal