This week we mentioned that eBay filed lawsuit against Craigslist because CL founders Craig Newmark and Jim Buckmaster had "unfairly diluted eBay’s economic interest in the company." What happened was that CL reduced eBay's economic interest in Craigslist by more than 10 percent. Why? To stave off a potential takeover. At least according to CL blog:

We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us.

Coming from a shareholder that views craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives.

(Wow, eBay really is kinda sneaky at times.)

But according to an ABC 7 report, eBay bought a minority interest in the company in order to learn more about the classifieds business, "a portion of its own site that's been growing rapidly in recent years." (See, they just yearn for knowledge is all!) But with eBay ranking in at #17, with Cragislist at 45th (at least according to Alexa), it looks like Newmark and Buckmaster were just trying to protect their baby.

An aside: for your reading pleasure, the best Craigslist ad of all time. You've been warned.