eBay published a legal filing that finally sheds some light on its mysterious Craigslist lawsuit. As the WSJ tells it, here’s the story:
- eBay management went crazy watching Craig Newmark and Jim Buckmaster sitting on the Craigslist goldmine and refusing to capitalise on it. So eventually they decided to capitalise on it themselves–by founding Kijiji.
- Craigslist, understandably, saw Kijiji as a sign that eBay was trying to compete with it. Craigslist, understandably, therefore told eBay it was no longer comfortable having eBay as a shareholder.
- eBay’s Meg Whitman offered to buy the rest of Craigslist.
- Jim and Craig decided to dilute eBay’s stake below 25%, which would eliminate the ability for eBay to elect a board member. To do this, they entereed into a series of board transactions that diluted eBay’s stake by 13%.
Craigslist will respond to eBay’s filing in a couple of weeks. In the meantime, it has this to say:
“As those who know us best will recognise, every measure we have taken has been for the sake of protecting the long term well-being of the Craigslist community. 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.”