CraigsList slaps minority investor eBay, lawsuit ensues
eBay claims that CraigsList, traditionally very private about its owners, has recently taken actions in bad faith to reduce the value of the auction giant’s minority stake in the company.
Grumpy is a good word to describe eBay lately. It’s frustrated with Skype’s lackluster financial performance and is considering a sale, and it’s facing a fair amount of flak from sellers disgruntled about its decision to remove buyer feedback ratings. Now CraigsList is apparently poking eBay in the side, “unfairly dilut[ing] eBay’s economic interest in the company,” according to the New York Times.
Mike Jacobson, eBay’s senior vice president wrote “the recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist. Since negotiating our investment with Craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”
“On August 13, 2004, Craig Newmark announced on his blog that auction giant eBay had purchased a 25% stake in the company from a former principal. Some fans of Craigslist have expressed concern that this development will affect the site’s longtime non-commercial nature, but it remains to be seen what ramifications the change will actually have,” according to Wikipedia.
CraigsList must tread a fragile path between commercialization and keeping its users happy. Any introduction of overt advertising or high-priced listing fees is likely to create negative buzz and drive users away to competitors.
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August 31st, 2010
Who knows what happens next… All I know is:
“The only thing necessary for the triumph of evil is for good men to do nothing.” — Edmund Burke :)
April 29th, 2011
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