Craigslist and eBay are heading for all-out war as the two companies are preparing to fight it out in a lawsuit filed by the auctions site set to begin next Monday. The lawsuit is the culmination of a tense relationship between the two companies which has been going for more than five years now. eBay owns a minority stake in the privately-held Craigslist, the reason behind the dispute. The company is also saying that it plans to expand its classified offerings with acquisitions or partnerships in several countries.
eBay bought a stake in Craigslist in 2004 from one of the original investors, initially owning a 28.4 percent slice of the company. Despite initial claims that it would focus on Craigslist in the classified ads market, it later launched a competitor to the site, Kijiji, using inside knowledge it gained as a shareholder at Craigslist, the classifieds company says. This is the object of another lawsuit filed by Craigslist for unfair competition and other claims.
In 2007, after the launch of Kijiji in the US, Craigslist diluted eBay’s stake in the company to just 24.85 percent, losing its seat on the board in the process, a move which eBay claims was made using various illegal tactics. It filed a lawsuit as a consequence and, after two delays, the legal proceedings are about to s… (read more)