Tuesday, April 22, 2008

eBay Sues Craigslist

eBay Inc, has sued Craigslist in a dispute over whether the Internet bulletin board tried to weaken eBay's control. eBay has alleged in the lawsuit that the board of directors of Craigslist took "unilateral actions" to dilute eBay's 28.4 percent stake by more than 10 percent.

The suit, filed on Tuesday under seal, asked a Delaware Chancery Court to rescind the unspecified actions to protect eBay's stockholders and preserve its stake in Craigslist. The suit names as defendants Craigslist founder, Craig Newmark, who runs the company in a famously open-minded style, and Chief Executive Jim Buckmaster. Newmark and Buckmaster are the only members of Craigslist's board of directors.

In a blog posting late on Tuesday, Craigslist said it was "surprised and disappointed" by eBay's allegations, which "came to us out of the blue, without any attempt to engage in dialogue with us."

The lawsuit by "a company that views Craigslist as a prime competitor ... seems unethical, and suggests ulterior motives" such as a "hostile takeover" of Craigslist or the sale of eBay's stake to an "unfriendly party," the posting said.

Craigslist said it has always treated eBay "very fairly" and plans to continue doing so, despite this "unfortunate development."

Read the full eBay press release

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