The rivalry between eBay and Craigslist had been in the news for over a couple of years now. First, eBay acquired shares on Craigslist then a year later launched Kijiji, a classified site very similar to Craigslist. In 2007 they launched Kijiji in the US and filed suits against Craigslist about pushing them out of shares but Craigslist filed a case against eBay with their hostile intention of taking over.
Craigslist was more on the passive side while eBay continues to push further and even changed Kijiji to eBayclassifieds.com with a mobile application. They wanted to out beat Craigslist with their “better” online classified ads site with their new ability of taking pictures and creating listings instantly through their mobile application. With the name change and better mobile application, they expected and hoped to beat Craigslist but statistics for unique visitors show otherwise. Craigslist continues to be on the 45-55M range of unique visitors while eBayclassifieds.com on the 0-1 million range. If eBay wants to beat Craigslist they really have to think of better ways to raise the competition, perhaps by reviving their good name first.
Last Friday the CEO for Craigslist, Jim Buckmaster, had testified against eBay and how they do business. In his statement, he said that he would not have agreed to be in business with eBay if he knew then what he already know now about how they do business.
He added as he was questioned by Michael Clyde, the counsel, he said that as their relationship with eBay continually grows sour, he kept on remembering the assurances he received from the ex eBay CEO Meg Whitman back in 2004 where eBay got a 28 percent stake on Craigslist amounting to $32 million. But then, eBay launched the site Kijiji, which is a direct competition for Craigslist, Mr. Buckmaster then starts to question the trustworthiness of Whitman.
His testimony focused on the exchange of emails between the two CEOs. He said that it doesn’t feel right that coming from one of the large shareholders, they would launch a competitive site. Buckmaster also added that he is no longer comfortable with doing business together with eBay as their shareholder.
Buckmaster will testify again on Monday but he said that Whitman is slamming her door on them with promises she can’t keep.
The lawsuit that was filed by eBay Inc vs. Craigslist is now heading to the Delaware State courtroom and there will be a trial that would reveal the inner issues where eBay’s Meg Whitman and Craigslists’ Craig Newmark would be brought to the witness stand for their testimonies.
This trial had been delayed twice already. EBay and Craigslist are two giants of the internet industry. Ebay had pioneered the online auctions and generations over $8.5 billion in 2008 and has thousands of employees while Craigslist is a privately owned company with just a few employees and offers mostly free service for people who wants to buy and sell stuff using their online classifieds site.
Ebay’s April of last year’s law suit claims that Newmark and Jim Buckmaster had a “coercive plan” back in 2007 that decreased the percentage stake of eBay from 28.4 percent to 24.85% which falls below the 25% mark making them lose their seat on the board of Craigslist. The judge in the Delaware Chancery Court had dismissed two charges from eBay but five more counts are still in process including this case.
On the other hand, a month after eBay filed a case, Craigslist filed a separate lawsuit claiming that eBay have deceptive practices such as false advertising as well as trademark infringement. Craigslist claimed that eBay used their seat on their board to get information and launch their own website that is a competing site similar to Craigslist yet denying that it was eBay’s intention.
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