A judge in Delaware has restored eBay’s 28.4% share holding in online classifieds site Craigslist. eBay general counsel, Michael R. Jacobson, said: “We are very pleased that the Court gave eBay what it sought from the lawsuit. eBay brought this suit to protect its own shareholders and preserve its valuable investment in Craigslist.”
Though eBay was quick to declare total victory, it isn’t: Craigslist still has the ability to keep eBay representatives off their board of directors.
The argument between the two companies goes back to 2005. eBay was one of just three shareholders in Craigslist, and when they launched their own classified site (Kijiji, now renamed eBay Classified), Craigslist founders Craig Newmark and Jim Buckmeister asked them to sell their shares either back to the founders or to another third party. eBay, citing a prior agreement that said they were free to compete, refused. Craigslist diluted their stock to 24.9%, and implemented a staggered board, meaning that eBay representatives could effectively be kept off it. The relationship between the two companies has grown increasingly rancorous ever since.
Craigslist’s blog says “we are pleased with the Chancellor Chandler’s split decision,” and promises that an unlawful competition suit against eBay will now go ahead. Meanwhile, Craigslist founder Craig Newmark said in his own blog post: “We’ll keep fighting the good fight in California.” This isn’t even nearly over.
The full ruling is here, and really does make amazing reading.
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dealbook.blogs.nytimes.com/2010/09/13/whats-next-for-ebay-craigslist-and-poison-pills/
What’s Next for eBay, Craigslist and Poison Pills