Online auction company eBay (NASDAQ:EBAY) owns just over 28% of classifieds company craigslist. eBay bought in during 2004.
Now, eBay is suing craigslist and its management for diluting its share in craigslist, something it contends the classifieds company can not do. "The recent actions by the craigslist directors have disadvantaged eBay and its investment in Craigslist," Michael Jacobson, eBay's senior vice president and general counsel according to The New York Times.
All of this is a great mystery. eBay has not said what it paid for its stake. It has also not disclosed why it thinks craigslist has taken actions to cause dilution.
Why did eBay disclose the lawsuit but insist that its details be sealed? Craigslist is a private company, so there was no need to let the public know about the move.
One of several things might be happening. eBay has no control over craigslist management. Craigslist is one of the largest websites on the internet. eBay might want more of a say in how the company is operated and how it makes money. Many listings on craigslist are free. eBay may believe it will never make money on its investment if craigslist does not become more aggressive in its pricing.
The other possible motive is that eBay may want to try to force craigslist into a sale, with eBay being the acquirer. The auction firm needs something to jump-start its US business. A judgment against the classified company, especially if it includes any money damages, might open the door for eBay to move in.
Douglas A. McIntyre is an editor at 247wallst.com
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Reader Comments (Page 1 of 1)
4-23-2008 @ 7:19AM
fredspeciale said...
I'll stop using CL once they try to charge me
4-23-2008 @ 9:11AM
luv2zzzzzzz said...
This is because all the people they're trying to force into using PayPal are going to Craigslist. It's an intentional tactic designed and executed by Ebay and their new shi thead leader who wants to throw everyone who has made Ebay what it is under the bus claiming a "flea market atmosphere".
Hey jer coff...if you only want the powersellers then I'll be at Amazon, and scru your plan to keep everyone's funds hostage for 21 days while you collect interest. If you keep it up someone's going to come along and kick you rass and eat your lunch.
4-23-2008 @ 9:14AM
fribadiloro said...
EBay is not "becoming" bad, it has been bad for a long while now. They are now big enough that they do not give a damn about what we the users say or do. And a bunch of us have turned to CL to get away from EBay, they go after CL. The natural order of things for business. Just horrible for us and I do not know one thing we can do.
4-23-2008 @ 9:17AM
Warren said...
"This is because all the people they're trying to force into using PayPal are going to Craigslist. It's an intentional tactic designed and executed by Ebay and their new shi thead leader who wants to throw everyone who has made Ebay what it is under the bus claiming a "flea market atmosphere".
Hey jer coff...if you only want the powersellers then I'll be at Amazon, and scru your plan to keep everyone's funds hostage for 21 days while you collect interest. If you keep it up someone's going to come along and kick you rass and eat your lunch."
Are you in the third grade? Instead of hiding your cursing, why not learn to communicate like a grown up?
4-23-2008 @ 6:25PM
jjavajjane said...
Ha! ebay is becoming as bad as Wal-Mart. Big corperate conglomerate trying to take over the world. If ebay starts charging CL users for listings it will start a HUGE domino effect. Most people that use CL with then find somewhere else to post thier listings leaving very few there to "surf" the paid listings. Hence, leaving CL a desolate has been. At best it will become a paid listing site for employers to post job listings and we all know there are already too many of those on the net.