April 22, 2008
EBay Files Suit Against Our Beloved Craigslist
You're so mean, eBay.
What did they do this time, you ask? Well, today they filed a lawsuit against Craigslist in a Delaware court. Why? According to the New York Times, Craig Newmark and Jim Buckmaster "took actions that unfairly diluted eBay’s economic interest in the company." (EBay snatched up a 28.4 percent minority interest in the company back way in 2004.) EBay Senior VP Mike Jacobson goes on to tell the NYT:
"The recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist," said Mike Jacobson, eBay's senior vice president and general counsel, in a written statement. “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."
First its evil twin, and now this. But we are curious about these alleged "unilateral actions." Any guesses?
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Can someone please tell me why these two California companies are in a Delaware court?
according to NYT, "the company filed the suit with the Delaware Court of Chancery, a forum for resolving internal disputes among companies registered in Delaware."
katyG, many corporations are registered in delaware due to a combination of corporate-friendly laws in that state, lack of state taxes for corporations, and also a large body of precedent from years of litigation there. a lawyer friend of mine explained that it makes it easier for a company to know what they can and can't do because they have already tested out the limits of many of those laws in that state..
look up delaware corporation on wikipedia for more details
Delaware is a corporate haven
http://en.wikipedia.org/wiki/Delaware_corporation
The prior owner of this chunk of craigslist (apparently) was very concerned about this very same dilution issue.
Craig and Jim could get together and act to the detriment of the other shareholder - that was the concern.
Just one more reason to think: eBay sucks.
eBay Sucks?
eBay is owned by hundreds of thousand shareholders, Craig has enriched himself on the backs of these shareholders. If he wanted to keep control of his "non-profit" that nets him millions, he could have not cashed out and sold a stake to eBay.
mushmouth: are those your own clueless words or are you copying them from someone else?
jimH: Majority rules?
I can't speak to this specific issue, but as someone who used to do the CL thing frequently I do know that it wasn't Craig and Jim that sold the shares, but someone who held a partial interest in CL sold it to eBay on their own. Or something like that...
Craig got $10 Million
Jim got $6 Million
the guy that they pushed out (who owned a 25% stake for helping found and fund the company) got $16 Million. eBay had 28% after the deal. BTW what is Craigs Salary? It is rumored to be anywhere from 5 to 20 Million a year. Whatever it is it is TOP Secret. CL generates 80 Million a year in revenue, it employs 25 people, and it operating expenses are less than $5 million. You do the math.
Thanks for the crash course in US economics, folks. Very interesting...
Well sure, majority rules, but there are such things as minority rights.
YES! Comment war!
Craig rocks.
Let me see, boring ugly white men sue boring ugly white man and his firend over boring shareholder nobjockying. Remeber, these "tradesmen" are our servants, not our idols. (Where the fuck did that come from?)
BTW what is Craigs Salary? It is rumored to be anywhere from 5 to 20 Million a year. Whatever it is it is TOP Secret.
Like most-if-not-all private companies. Ever look for information about Trader Joe's internal numbers? Rainbow they ain't.
Does anyone really still use either of these sites? I thought they were museum pieces from when people used the term "information superhighway" unironically.
"Remeber, these "tradesmen" are our servants, not our idols."
Servants? That's clearly not the case unless you're a shareholder - I'm not, so neither craig nor the ebay guys owe me anything. Whether someone idolizes them or not depends on whether or not they're into business and finance and perhaps find these individuals to be something other than "boring ugly white men". I'm not quite sure I see your point.
fwiw, I use CL for calls for artists and ticket sales. How else would I get to see Goldfrapp?
I got my job on craigslist, for which I will forevermore be willing to bend down and kiss craig's ass. and is there any other way to find an apartment?
Surely you jest, mattymatt.
I suspected something like this would happen ever since I heard ebay had bought a chunk of craigslist.
Good for Craig! Hope he kicks Ebays ass!