Craigslist founder Craig Newmark

Craigslist Files Countersuit Against eBay

May 15, 2008 08:00 AM
by Liz Colville
Following eBay’s suit against Craigslist, in which it has a 25 percent stake, Craigslist filed a countersuit charging shareholder abuse.

30-Second Summary

In response to eBay’s lawsuit against Craigslist, filed April 30, the classifieds Web site has filed a countersuit claiming the online auction giant has “abused its position” as shareholder of the company, British newspaper The Guardian reports.

The initial suit filed by eBay states that Craigslist “unjustly denied representation” of the company on its board, and that primary shareholders Craig Newmark and James Buckmaster engaged in private meetings and transactions intended to benefit them and dilute eBay’s stock.

Craigslist and eBay joined forces after “an unusual 2004 transaction in which eBay acquired roughly 25 percent in Craigslist from a disaffected former business partner of Newmark,” according to

Relations between the companies soured in 2007, however, when eBay launched its international classifieds site, Kijiji, in the United States. Craigslist deemed the launch “competitive activity,” as defined in its shareholder agreement, which dramatically changed the shareholder terms between the two companies.

Shortly after the launch, Craigslist expressed interest in finding a “new home” for eBay’s share of the company. But eBay’s then CEO, Meg Whitman, responded with an email saying that her company would “welcome the opportunity to acquire the remainder of (the company) we do not already own.”

Headline Links: Craigslist strikes back at eBay

Background: Craigslist and eBay relationship sours

Opinions & Analysis: Bloggers react to Craigslist countersuit

Reference: Craigslist and eBay court documents

EBay’s Suit against Craigslist
Craigslist’s countersuit against eBay

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