Craigslist's Response To eBay: We Had To Do It!

from the well,-that's-one-way-to-think-about-it dept

Mon, May 19th 2008 2:56am — Mike Masnick

After eBay sued Craigslist, Craigslist's initial responses were rather weak. eBay made a pretty strong case arguing that Craigslist's board had unilaterally diluted eBay's shares -- which seems pretty questionable. Craigslist initially shot back by accusing eBay of doing the same things eBay was accusing Craigslist of doing -- but that was somewhat misleading. eBay wasn't complaining about the specific actions Craigslist was taking -- but the fact that they had done so unilaterally, despite eBay's ownership stake and board position. Then, Craigslist countersued eBay with a laundry list of charges that effectively amounted to "we don't like them being on our board." Both of these responses were a bit disappointing. While I like Craigslist, and respect Craig and Jim, they still hadn't explained why it was legal for them to unilaterally dilute eBay's shares.

The company has now, finally, filed a response to the lawsuit, which effectively seems to say "we had no choice, since eBay being on our board was such a problem." Basically, the argument is that, as board members, they needed to do what was in the best interests of the company -- and that meant getting eBay off the board through any means possible. Unfortunately, that's still just not convincing. It's an "ends justify the means" argument, which seems very un-Craigslist-like. As much as it may be true that eBay being on the board was a problem, that still doesn't allow existing shareholders to unilaterally change the ownership structure of the company. Maybe there's more to this, but so far, it's hard to see how Craigslist wins this in court.

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Filed Under: court cases, dilution, ownership
Companies: craigslist, ebay

16 Comments

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some old guy, 19 May 2008 @ 3:39am

Sacrifice
In other words, they would rather go down in flames than let ebay consume and corrupt them.
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Tim Bobbitybim, 19 May 2008 @ 4:00am

Re: Sacrifice
Much as it pains me to take the side of eBay, Craigslist have already begun their descent if they're resorting to what is in effect stealing from (some of) the owners.

There's nothing noble in this. They led themselves down the path to being consumed when they sold partial ownership to eBay.
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Anonymous Coward, 19 May 2008 @ 4:57am

Never though I would read the world unilateral so many times in one story.
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Thundercracker, 19 May 2008 @ 6:05am

Ebay has got them
Based on what I have seen, Ebay has got them by the short and curlys.
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Anonymous Coward, 19 May 2008 @ 6:22am

This reminds me of the Citrix vs Microsoft debacle.
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Nate, 19 May 2008 @ 6:43am

Craigslist is going to go the way of the dodo, if they don't do something to improve themselves. I think this is what Ebay wants, though. Craigslist is grasping at straws here. http://www.custompcmax.com
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Jim (profile), 19 May 2008 @ 6:45am

Who really started this?
I have no idea if it matters but did eBay not create a Craigslist clone after getting its stock ownership of Craigslist. That seems not very cool to me. What can a public company do about that?
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sage, 19 May 2008 @ 8:38am

Craigslist did not sell shares to Ebay. Ebay got them from an ex employee.
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Overcast, 19 May 2008 @ 11:06am

Who cares? Maybe it's good and will give the newspapers a reason to exist. I'll use craigslist while it's out there, but E-bay with Pay-Pal = hassle.
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Jeremy, 19 May 2008 @ 1:38pm

Companies are not democracies it is survival of the fit.
Craig should have fought off ebay from the beginning. Why would you want the people who see you as competition on your board? If craiglist was not around think of how a sad lot sellers would be not having this great free resource and how much more ebay could charge.

What did Craig think ebay would do on their board? Was he thinking they would be twiddling there thumbs while they watched all the potential ebay sellers list on Craig's portal for free! Come on, who didn't see this coming?
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Anonymous Coward, 19 May 2008 @ 1:52pm

ebay is the walmart of the internet...

employing ruthless business practices in order to ensure world domination can continue.
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Rahulbajaj, 27 May 2008 @ 3:29am

Fight can harm both
The fight between Craigslist and ebay(kijiji) is certainly affecting their brand value in the market. These website are well reputed and have a huge pool of users. I myself use these classified to buy or sell nearly anthing. Also i use clickindia.com and sometime thisismyindia.com.
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Hank Freid, 29 May 2008 @ 11:30pm

Craigslist's Response
Rahulbajaj has rightly said that their fight is affecting the products.
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indyaz, 6 Sep 2009 @ 7:08am

Fight is bad Result
Both are(ebay, Craigslist) respected company if they fight each other then affecting their brand value in the market.
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Free ads, 10 Jan 2010 @ 9:52pm

Top india classified site
Much as it pains me to take the side of eBay, Craigslist have already begun their descent if they're resorting to what is in effect stealing from (some of) the owners.

There's nothing noble in this. They led themselves down the path to being consumed when they sold partial ownership to eBay.

Top india classified site
Adsglobe.com
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sunshine (profile), 26 Oct 2010 @ 4:32am

New classifieds site
jeejuads.com is a newly launched indian classifieds site. check out :)
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