eBay Vs CraigsList Complaint Released

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1. Andrew
   

   April 30th, 2008 at 11:24 pm

   I’m not a fan of eBay but here it seems to me that they are right. They purchased a 28% stake in Craigslist and due to CLs playing tricks they are now down to 24%

2. Akash Manohar
   

   April 30th, 2008 at 11:27 pm

   This smells like eBay is trying to play some trick like what Microsoft is doing to Yahoo.
   Maybe like… pressure them with a series of lawsuits and then force them to sellout

3. Jay
   

   April 30th, 2008 at 11:30 pm

   Craig and Jim are evil. I hope they are stuck with punitive damages too.

4. nation
   

   April 30th, 2008 at 11:40 pm

   Duncan,

   there’s a typo in “Craiglist” in the before last sentence

   cheers

5. Andrew
   

   April 30th, 2008 at 11:44 pm

   he also spelled too wrong in the last sentence

6. SutroStyle
   

   April 30th, 2008 at 11:58 pm

   Craig Newmark is a real entrepreneur, one of very few left in this country. he called his creation after HIS OWN name (like Henry Ford for or Boeing for example), bootstrapped it with no “VC” funding (just like Bill Gates incidentally).

   Apart from few companies like this, the current climate in the Silicon Valley (at least in software) reminds me of American high school games, like high school students play model UN: they role- play business women, founders, VCs. This bs will get sorted out by 2010.

7. Deva Hazarika
   

   April 30th, 2008 at 11:59 pm

   It’s hard for me to not root for true entrepreneurs like Craig, but the arbitrary issuance of the ROFR “inducement” shares seems almost comical if the way things went down is accurately portrayed in this document. Mainly I just love the fact that this was stated in the legal document: “it nonetheless resolved - with the corporate equivalent of a shrug” so much funnier than some Latin mumbo-jumbo.

8. pankaj
   

   May 1st, 2008 at 12:07 am

   fhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
   hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
   hhhhhhh

9. Humphrey Bogus
   

   May 1st, 2008 at 12:44 am

   Could Mike weigh in on this one, being an ex-WSGR lawyer and all? Would be curious to hear his thoughts.

10. randy
    

    May 1st, 2008 at 12:56 am

    I dont’ trust ebay. From what I can tell, they’ve become a total a disgrace. Ebay’s belligerent employees are to blame. A bunch of ignorant weirdos. Totally unsupervised! And most barely speak English. Their favorite game: seeing just how much crap customers are willing to eat take before closing their account.

    I don’t agree with Craigslist politics, but I like their outlook and I wish them success in ridding themselves of ebay’s filthy image.

11. Kyle Dylan Conner
    

    May 1st, 2008 at 1:25 am

    Hah. I live in DE.

12. Arnie
    

    May 1st, 2008 at 1:44 am

    Craig is a liar. First he tries to screw over co-founder Knowlton. Then he lies about how eBay bought their stake pretending he knew nothing about it. And now he uses underhanded tactics to screw eBay as well as the few employees who have stock options. For such a saintly reputation, he sure isn’t very good at being honest and telling the truth.

13. David
    

    May 1st, 2008 at 2:12 am

    This is interesting. If the allegations in the complaint are remotely accurate, Jim and Craig definitely engaged in self-dealing transactions, and they ovbiously did not cleanse the self-interest by a vote of the independent directors or the minority shareholders or any other method (independent committee of the board, etc.)

    Most of the important precedents I’m aware of on defensive measures (like poison pills) that describe what is ok and what is not are in the context of public companies. Poison pills were created to deal with hostile takeovers, which really only exist in the the public company context. Think about it - only in a public company is the ownership of the company separated from the running of the company, and only in a public company could a hostile acquirer just buy up shares on the open market in order to amass a controlling stake.

    At this point, it looks like eBay has a pretty good case, but I’ll be eager to see what Craig and Jim come up with when they file their answer.

14. Ivan
    

    May 1st, 2008 at 6:26 am

    I admire Crain and Jim. They are a great people.

    I also think they are the only 2 entrepreneurs out there that really care about the populace. When eBay and Amazon look after the dollar sign these guys care more about the happiness of their customers and their life with their partners.

    I have no choice but to take their side on this mess. After all eBay bought the 24% stake in CL by shady means from a disgruntled employee.

    FU eBay.

15. Majo Tajo
    

    May 1st, 2008 at 6:26 am

    Don’t know what to say on this except that those lawsuits are ridiculous. I ask

    “Do people have anything better to do then hammering each other?”

    Craigslist I support yet In past 10 years on internet I only visited his website 4 times just because I don’t know how to navigate on that site for real.

    On other hand who knows what is the truth , this is one of those lawsuits that might be unresolved, yet it will give them even more publicity. Same sh** with Yahoo and Microsoft “about the big deal”

16. Model inc.
    

    May 1st, 2008 at 6:30 am

    a cool new commercial for windows: http://www.youtube.com/watch?v=aRVnQs0XD30

17. omer
    

    May 1st, 2008 at 7:04 am

    comment

18. jc
    

    May 1st, 2008 at 7:36 am

    I don’t have any problems with craigslist and if ebay wants to create a competitor then they should sell their shares in CL.

    CL already is very profitable and besides maybe adding a few banner ads or comparison shopping links, its business model is sound. Most people like CL because its simple, easy to load, easy to navigate. For newer sites, the flash ads slows down my browser and it sucks. Sometimes simple and free attracts users and customers. IF CL changes, those customers will go elsewhere.

19. Sean Harrison
    

    May 1st, 2008 at 7:46 am

    If they don’t like it, sell the shares.

20. Shalini Nambiar
    

    May 1st, 2008 at 7:54 am

    eBay wanted/ got a piece of Craig, then eBay launches kijiji, now eBay wants Craig to play fair …??? did i miss something!

21. steve
    

    May 1st, 2008 at 8:08 am

    wow, if we ever tried crap like this our VCs would probably find a way to have criminal charges files (and rightfully so). I’m looking forward to the response, but my guess is the “we didn’t like that term so we just ignored it” defense doesn’t play in Delaware.

22. lajolla5380
    

    May 1st, 2008 at 8:15 am

    Too Far.

23. Brian D
    

    May 1st, 2008 at 8:34 am

    Interestingly, EBay spammed me with a Kijiji advertisement for the first time today. Subject was: “Kijiji.com: Free Local Classifieds”

24. YouBoo
    

    May 1st, 2008 at 9:24 am

    I think Craig is right. Ebay is a shareholder and now they own a competitive product… that’s not right. You own Google stake but then you own yahoo stake and sit on both boards…. nope big mistake Ebay, bid on that!!!

25. silicon valley dropout
    

    May 1st, 2008 at 10:29 am

    screw ebay

    i root for little guys

26. EH
    

    May 1st, 2008 at 10:43 am

    You know, there’s just a part of me that hopes the merits fall to CL’s benefit. EBay should rightly be fucked with a pinecone for engaging in screwy behavior like this. EBay knows they’re being jerks, regardless of whether they’re able to hang Craig up on a technicality.

27. EH
    

    May 1st, 2008 at 10:43 am

    Oh, BTW Scribd sucks. I’m sick of them clogging up my search results.

28. AW
    

    May 1st, 2008 at 11:12 am

    @27: God, yes. I’ve started filtering them out of my search results.

29. craig and jim lie
    

    May 1st, 2008 at 11:31 am

    So on craigslist’s own blog they say

    “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.”

    I commented on craigslist blog (but i’m sure they won’t post it).. doesn’t craigslist dominate the onlince classified market to maximize their own profits?

    craig and jim have ALWAYS projected onto other’s what they do themselves. they only talk about altruism and hide the business aspect of their business as much as possible.

    this is typical (going back to at least ‘99).

    i hope ebay exposes them for what they really are. and yeah i’m sure people will hate on me.. but if you haven’t actually dealt with them then you don’t know the real story.

    perception is not reality, and ebay is learning this now..

    good luck ebay

    ps. i have nothing to do with ebay. i have dealt with and followed cl since the early days.

30. David
    

    May 1st, 2008 at 12:08 pm

    To those who are saying “eBay should just sell the shares”: Craigslist is not a publicly traded company. There are only 2 other shareholders. eBay can’t just go tell its broker to put up the shares for sale - there is no market for Craigslist stock.

    eBay only owns a minority interest, which is worth much less than a controlling interest ON A PER SHARE BASIS, especially in a private company. A minority interest is worth less because it has no control over its investment:
    For instance, Craig and Jim are both shareholders and managers. Because of this dual role, they could decide they are never going to pay out dividends (to themselves as shareholders), but then pay themselves $10 million salaries in (as managers). If they pay out dividends they have to give eBay its proportional share of the payments. If they give themselves exorbitant salaries, eBay (or whoever it might sell to) gets nothing because it is only a shareholder, not a shareholder/manager. In this scenario, eBay can’t do anything but sue them.

    You see why it would be tough for eBay to sell its stake? Sure, Craig and Jim would be happy to buy back the shares - they can give a lowball offer and if eBay doesn’t like it, there is no alternative. Or they could give a fair offer and then make up their out of pocket costs by paying out dividends as soon as they own the stock.

    A minority owner in a private company is often locked into its investment. eBay was obviously fine with that when it bought, and I’m sure it wasn’t looking for dividends, it was looking at strategically owning a stake in an important complementary business. So you can see why it would be more concerned at having its ownership interest diluted unless it signed the ROFR (locking it in even more).

    As far as eBay having a conflict of interest or something? Any “violation” would just be a violation of the contract they signed (shareholder agmt) - there is no duty on a shareholder not to compete with the company it owns, that would be ridiculous. If a shareholder wants to compete and possibly reduce the value of its own investment, that’s just a business decision.

31. Lookcube
    

    May 10th, 2008 at 6:16 pm

    In the long run, competition is going to help users.

    Craiglist is an enormously useful service. I’ve found places to live, meet great people, and helped grow small side businesses with it. Nearly everyone I know has had at least one positive experience with it.

    Craiglist however has never really had serious competition. Now they do - not only from eBay, but also from spammers and bots. Competition is good for improving quality and service, but it’s rarely good for the market leader. I think I first read on Techcrunch the idea that modern websites are like TV shows, and that even successful websites only have a lifespan of 5-7 years. If that’s the case, then the battle for free local classifieds is about to heat up. This is great news for people who enjoy innovation.

    Craigslist is not known for innovation. Nor does it necessarily need to be - after all if it’s ain’t broke, don’t fix it. It’s simplicity is a large part of it’s success. However the Internet thrives on innovation, and those who stand still are eventually surpassed. Craigslist knows this, which is why they recently announced that they are hiring in their blog. But why so late to respond? When you have a lock on a market, there is no incentive to change. eBay is a great example of what happens when a successful website lacks serious competition. Competition is going to be beneficial for users. imo, eBay/Kijiji is a terrible alternative, but others will emerge as the better service…

    I think about this stuff a lot - which is why I’ve just released my own free local classifieds service called Lookcube.com - There’s enormous potential in local websites - a chance for people to meet, join, and organize, small business and freelancers to grow, and goods to be exchanged - all outside of the corporate sphere - if I can help make that happen, my effort will be a success.

32. Tim Abbott - Rummagepad
    

    May 14th, 2008 at 3:05 am

    @Lookcube,

    I totally agree. I love craigslist, always have, but there’s a lot more that can be done there. That’s why we at Noocleus Media released rummage pad. While we only deal with sale listings (garage, rummage, merchant, etc) and nothing else, we welcome alternatives to mega sites like craigslist. We think a lot more can be done and hopefully others can offer more competitive services. Our site is extremely small since we just launched a couple of days ago and probably before we should have, but we think there’s a lot that can be offered in the classifieds space.