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eBay Sues Craigslist
phpmysqldev writes "In a very random move eBay has filed a lawsuit against Craigslist to 'protect its investment and shareholders'.
"In a statement, eBay claimed that in January, Craigslist executives took actions that 'unfairly diluted eBay's economic interest by more than 10%'." eBay is a minority shareholder of Craigslist owning 28.4%. Craigslist suspects eBay's intentions are less than honorable, speculating about a possible hostile takeover. The court case is sealed and eBay has not elaborated on its claims."
Nobody knows nothin'. If they doe, they ain't sayin'.
But of course we're going to discuss it fully here at slashdot!
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
...they added a poison pill to the articles (or however corporations do such things) in order to prevent a hostile takeover. As a result, ebay's position and their ability to potentially take over Craigslist has been diminished. Boo hoo, cry me a river.
At first, I thought ebay was suing because craigslist was cutting into ebay's auction business. That would be ridiculous, which in American lawyerese seems to be spelled "with merit". Then I was shocked (shocked!) to learn that ebay owns almost 30% of craigslist. Nice little empire, indeed. In reality, it's just a pissing match.
Is it just my observation, or are there way too many stupid people in the world?
How could eBay perform a hostile takeover? I believe the balance of Craigslist stock is privately held, and NOT on the open market. I don't think eBay can force someone to sell stock to them.
That being said, I think this is the long delayed consequences of selling that stake to eBay in the first place. Unless there is some special language in the company charter, the commonly accepted duty of corporations is to maximize benefits to the shareholder (not saying that it is right, only that it IS). I think eBay bought in years ago expecting to cash in on the big IPO, which never happened, or reap dividends when Craigslist started accepting ads, which it didn't. Now they want to use their minority share position to force the Craigslist management to run things the way eBay wants it.
I hope Craigslist crushes them, but I'm not betting on it.
"As God is my witness, I thought turkeys could fly." A. Carlson
Did they sue them because Craigslist isn't obfuscated, confusing, feature-bloated and buggy enough to suit them?
Just curious.
I've listed and sold a few items on eBay over the years, including recently and must say, eBay continues to get it wrong. What a fussy, buggy system. Simply interfaces gave way to bloated, unpredictable and just silliness.
As a buyer, the searches are less helpful all the time. "Look, dumbasses, I'm trying to find what I'm looking for," not a lot of other tripe you think I might be interested in.
eBay, want something to do? Go after those fecking frauds selling fake shite out of China. That should keep you busy for a while.
Meanwhile, Feedback system continues to be worthless.
A feeling of having made the same mistake before: Deja Foobar
Well, what if craigslist wanted to bring on new employees (or incent existing people)? In that case they'd have to issue more shares and *all* shareholders already in the company would get diluted - nothing illegal or immoral about that. Existing minority shareholders might not be happy about it or agree with the board's decision, but it's not their call to make.
Yeah? Well I think you're overrated too.
Then CraigsList shouldn't have issued 100% of the company at the initial offering - they should have issued a portion of the company as shares, and retained the rest as the company holding. Then, subsequent issuings can be made without diluting current holders share.
If they did issue 100% of the company, then CraigsList should have held a buy back to perform a reissue to new staff - that's precisely what my current employers recently did in order to give new Directors a share in the company.
Unless they had a *really* good reason to dilute current holders shares, CraigsList are in trouble here.
Craigslist is a untapped gold mine, and eBay knows it. eBay's growth is tepid, at best, and they need some way to appease Wall Street. Why not connive plans on a hugely profitable yet potentially hugely more profitable site like Craigslist? If a hostile takeover was ever their goal and Newmark and Co. nipped that idea in the bud, I'd be a mad eBay, too.
Online auction site eBay acquired a 28.4% stake when it bought shares from a former employee who had been given equity by Mr Newmark.
Public company: Shares for sale to/from anyone via the official markets (NASDAQ, AMEX, NYSE). Private company: Shares for sale to/from anyone via go find them yourself and hand over the cash in person.
(Ignorance of the business world is bliss.)
Ignorance of business gets you screwed by the first unscrupulous person you have to do business with. Good luck with that unless you're a hunter/gatherer hermit who never does business with anyone.
Because when I think of "the little guy", I immediately think of newspapers.
The internet is bound to kill newspapers for one reason or another eventually anyway. I can't really take issue with Craigslist being a good, cheap middleman. Enough companies "make the most of their income potential" (EXXON, eBay, etc.) to offend MY sense of fairness, hahah.
I like basketball!!1!
Technically you're correct. But I find it hard to believe that eBay really cares about dilution of their interest in a small, marginally profitable company. What they do care about is that company's failing to make the most of its potential revenue streams. I suspect this suit is really about getting leverage to make them start charging for some of the services they now give away.
D'oh...that's what shareholder agreements are for...to prevent shareholders from selling to anyone that the other shareholders don't approve of. Anyone that goes into business with a family member without a written agreement is a fool.
Bill Clinton: Pimp we can believe in. - The Shirt!!!
On the contrary, this is the way a free market should work. I see craigslist as a somewhat scrappy underdog that is getting ahead by offering their services at a lower rate than the other guys. If this makes it more difficult for the other guys to make fat margins, they had better adapt or be prepared to lose their market share. Calling craigslist unfair just because they don't charge as much as the other guys is just silly.
One interesting side note - I have used Craigslist on numerous occasions both to find and get rid of stuff. I've also used eBay to do the same. To post something on Craigslist takes me about 3-5 minutes. To post something on eBay (cause I only do so once or twice a year) seems to take closer to 30 minutes. Lately I've completely abandonded eBay - not because they charge me money, but because the process of using their service is so much more difficult than Craigslist.
"Anyone that goes into business with a family member...is a fool."
Fixed that for ya'.
"As God is my witness, I thought turkeys could fly." A. Carlson
Unless your last name is Walton...
I said no... but I missed and it came out yes.
So, what you're saying is that Craigslist has managed to provide nominally the same service as the newspaper classifieds for less cost, is passing that savings on to the consumer, and that you find that 'wonky'?
What a bunch of jerks!
Culture is more than commerce
When I worked for a large technology consulting firm in Chicago, I was issued thousands of stock options although the company stock wasn't public. When I tendered my resignation, I was offered the opportunity to purchase the stock at the current valuation. One of the conditions was that if I sold the private stock to someone else, the company has to approve the transaction.
Because Pokemon is a crappy CCG with poor card balance and a devoted following comprised almost entirely of 12 year olds?
Try not to take me more seriously than I take myself.
After listening to the interview on NPR yesterday with the CEO I'm not in the least bit surprised. He seemed to be a fairly cool idealist who was building a site to scratch a need and then happened to develop it into a successful small company. He has repeatedly refused to turn the company into a commercial cash cow, and as he points out 95+% percent of the dotcom's that were started with the intent of going commercial are now out of business. He has a small company with a good product that makes enough money to support their costs and keep a small number of IT people employed.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Take note Libertarian fundamentalists, your flawed assumption is that companies will compete fairly leading to good outcomes for all. But that's not how it works in the real world where in fact companies are run by greedy people who will use any tactic fair or foul to win. Whether it's sleezy stock deals, lawsuits, or working to gain monopoly companies CANNOT be trusted to compete fairly in the so called "free market" which is full of foul collusion that screws the little guy and leads to bad outcomes for all. Like or not that is why we have regulation of markets above and beyond just making sure contracts are fair as Libertarians would like it.
Thus you FAITH in the free market is no more founded in empirical reality than the faith of creationists. Time to go back to the drawing board now that empirical reality shows you are living in a fantasy world with assumptions about human nature every bit as flawed as the communists were.
Tired of all the isms, don't exploit people as an employer, or a government, mmmmK?
Stop being a twat.
Don't forget that Ebay's going to take around 10% of the proceeds anyway, maybe more for small items.
Unfortunately, Ebay still has its place. If I'm trying to sell an obscure piece of vintage electronics gear, for instance, I'm probably not going to do very well listing it on Craigslist. (I'd do even worse if I didn't live near a major metro area.) This is where Ebay is perfect, because you can sell obscure goods to an international audience very easily. Unfortunately, Ebay doesn't seem to care about that, and would rather cater to "power sellers" who sell boatloads of phone chargers and other cheap Chinese-made junk with high "handling" fees.
I really wish someone would make a viable competitor to Ebay.
"Untapped gold mine" means that there is an extractable, non-renewable resource that can be tapped for immediate revenue. I think it's a very apt description for how a company like eBay would look at craigslist:
A resource that they could extract advertising revenue for ~10-20 quarters, while destroying its value, and then move on to the next mine.
Craigslist current business model, however, can be better described as something like a tree farm or sustainable exploitation of a fishery, where the revenue production is comparatively modest in the short term, but consistent in the long term.
The Supreme Court has already ruled (in the 80's I believe) this is not the case. Craigslist managers are obligated to protect Craigslist as an artifical entity, collection of values, and network of relationships (of which the shareholders are an important but not exclusive group). And one of those collective values is a lack of agressive monitization.
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