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EBay and Craigslist are at odds regarding the competition in the online classifieds market. Ebay purchased 28 percent of Craigslist back in 2004 from an unnamed former executive who solicited buyers, but hostility between the two companies has risen since then.
According to eBay’s complaint, which was made public this week, Craigslist considers eBay’s new site Kijiji a competitive activity that conflicts with eBay’s shareholder rights into Craigslist.
EBay argues that Craigslist didn’t fairly interpret what rights they would and wouldn’t have and are suing Craigslist as a result.
EBay spokeswoman Kim Rubey said:
“The original agreement between the two parties always envisioned that there could be competitive activity.”
In a blog post on their site, Craigslist, on the other hand, accuses eBay of trying to control the classified business. However, it is no secret that eBay has intentions of eventually obtaining total control of Craigslist. In July, former eBay CEO Meg Whitman said she would “welcome the opportunity to acquire the remainder of (it).” The site is reported as being worth several billion dollars.
EBay first launched Kijiji in 2005 for non-English speaking countries and launches in the U.S. in 2007. On the same day as the U.S. launch, Craigslist sent a letter to eBay stating it had been involved in competitive activity.
Craigslist CEO Jim Buckmaster said in another letter:
“We are no longer comfortable having eBay as a shareholder, and wish to explore options for our repurchase.”
Buckmaster along with Craigslist founder Craig Newmark have taken action to ensure that eBay cannot “elect a director, either impose new transfer restrictions on eBay or dilute its interest, and to dilute the interest of the employee holders of company stock options,” according to the complaint.
The Craigslist blog post goes on to 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.”
Craigslist says its actions are based solely upon protecting the Craigslist community.
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