Craigslist's Response To eBay: We Had To Do It!

from the well,-that's-one-way-to-think-about-it dept

After eBay sued Craigslist, Craigslist's initial responses were rather weak. eBay made a pretty strong case arguing that Craigslist's board had unilaterally diluted eBay's shares -- which seems pretty questionable. Craigslist initially shot back by accusing eBay of doing the same things eBay was accusing Craigslist of doing -- but that was somewhat misleading. eBay wasn't complaining about the specific actions Craigslist was taking -- but the fact that they had done so unilaterally, despite eBay's ownership stake and board position. Then, Craigslist countersued eBay with a laundry list of charges that effectively amounted to "we don't like them being on our board." Both of these responses were a bit disappointing. While I like Craigslist, and respect Craig and Jim, they still hadn't explained why it was legal for them to unilaterally dilute eBay's shares.

The company has now, finally, filed a response to the lawsuit, which effectively seems to say "we had no choice, since eBay being on our board was such a problem." Basically, the argument is that, as board members, they needed to do what was in the best interests of the company -- and that meant getting eBay off the board through any means possible. Unfortunately, that's still just not convincing. It's an "ends justify the means" argument, which seems very un-Craigslist-like. As much as it may be true that eBay being on the board was a problem, that still doesn't allow existing shareholders to unilaterally change the ownership structure of the company. Maybe there's more to this, but so far, it's hard to see how Craigslist wins this in court.

Filed Under: court cases, dilution, ownership
Companies: craigslist, ebay


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  1. identicon
    Rahulbajaj, 27 May 2008 @ 3:29am

    Fight can harm both

    The fight between Craigslist and ebay(kijiji) is certainly affecting their brand value in the market. These website are well reputed and have a huge pool of users. I myself use these classified to buy or sell nearly anthing. Also i use clickindia.com and sometime thisismyindia.com.

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