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eBay Sues Craigslist Over "Stake Dilution"
ace111 ( Score Rank: User did not make predictions in the last 30 days ) ace111  |  was scored on 16-Sep-2008 (430 days ago)
rBay, the world's largest online auctioneer, was an unsolicited suitor to quirky Craigslist in 2004. An unnamed former Craigslist shareholder sought out eBay and sealed a deal whose financial terms were never disclosed. Currently eBay owns a 28% stake in privately held Craigslist.

But in January, eBay says, Craigslist's board, consisting of founder Craig Newmark and Chief Executive Jim Buckmaster, unilaterally acted to dilute eBay's economic interest in Craigslist by more than 10%.

The complaint is under seal because of confidentiality restrictions, according to a company statement. Craigslist may ask the court to make the complaint publicly available, eBay said.

How will the law suit be judged?
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Top Predictor:   will101 (75% Accuracy)
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Comments (5)
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  1. oilman oilman 430 days ago
    0 vote This is Good This is Bad
    answered: [ * ] Other (please specify)
    (more)
    According to this news entry, the law suit is still pending:
    http://blog.wired.com/business/2008/0...
  2. will101 will101 576 days ago
    + 1 vote This is Good This is Bad
    predicted: [ Most Likely ] [ 63% ] Other (please specify)
    (more)
    I think this lawsuit will take a while. The result will probably be unknown by the closing date (aka. Aug 22)
  3. oilman oilman 577 days ago
    + 1 vote This is Good This is Bad
    predicted: [ Most Likely ] [ 74% ] Settlement
    (more)
    Very interesting news. Useful lesson for other successful startups who compete against larger competitors.
  4. ace111 ace111 577 days ago
    + 2 votes This is Good This is Bad
    predicted: [ Most Likely ] [ 61% ] Settlement
    (more)
    Although eBay is a much bigger company, the position of Craigslist is held strong. Here is how Craigslist responsed:

    "Coming from a company that views Craigslist as a prime competitor, filing suit without so much as mentioning these assertions to us beforehand seems unethical, and suggests ulterior motives," the Craigslist post read. "EBay has absolutely no reason to feel threatened - unless a hostile takeover of Craigslist, or the sale of EBay's stake in Craigslist to an unfriendly party, is their ultimate goal."
    1. ace111 ace111 577 days ago
      + 2 votes This is Good This is Bad
      Craigslist was recently reported to be on track to pull in revenue of $85-100 million this year – a fraction of what it could conceivably be making if it rolled out paid listings in more markets.

      Perhaps it was the time that eBay wanted a bigger control over the business direction. Craigslist reacted by diluting the ownership of eBay. Well, what a flight between big shark and smart fish.
       
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