Craigslist: Tainted Love
from September/October 2008
by Bonnie Azab Powell
That’s how Craigslist CEO Jim Buckmaster sees the unpleasant development in the company’s relationship with eBay, its big shareholder. The online classified-ad company, says eBay, could be worth billions—but the trouble is, founder Craig Newmark prefers to live by what he calls “nerd values.” As Corporate Board Member reported in our May/June issue (“Craigslist, the One Thing You Won’t Find for Sale on Craigslist.org”), Newmark believes “it’s more satisfying to change the world than to make more money.”
Internet auction giant eBay apparently would rather make more money. It bought a 28.4% chunk of the privately held Craigslist in 2004, a deal Newmark and Buckmaster, the only other shareholders, went along with in the belief that eBay, which got a seat on the board, shared their values. But they didn’t like it last year when eBay launched Kijiji.com, a direct (if so far anemic) competitor to Craigslist. According to an eBay lawsuit, the two men proceeded to dilute eBay’s shares to below 25%, and in so doing breached their fiduciary duty. Craigslist countersued, claiming eBay had abused its board position to spy, thus breaching its fiduciary duty and engaging in anticompetitive practices, among other transgressions. Craigslist wants a court to force eBay to sell its shares back to the company—which eBay has no intention of doing, at least not at any price that the do-gooder Craigslisters can afford. Its suit estimates Craigslist’s potential market value at several billion dollars. “We are simply looking to have everything returned to the status quo,” says eBay spokesperson Kim Rubey.
Craigslist wants a jury trial. In the meantime, you can get Buckmaster’s take on the ongoing battle by going to the Craigslist blog (at craigslist.org) and checking out such entries as “Openness, Honesty, and Integrity,” “Unlawful and Unfair,” and, yes, “Tainted Love.”
