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eBay vs. Craigslist Courtroom Fisticuffs Start Today
davekleiman writes with news that former eBay chief exec Meg Whitman took the stand today to kick off the battle that has been brewing between Craigslist and eBay. The waters are further clouded by Whitman's upcoming bid for governor of California. "eBay wants to shed light on the 'coercive plan' that it has said Newmark hatched with Craigslist Chief Executive Jim Buckmaster to dilute eBay's ownership stake, ultimately stripping eBay of its seat on the Craigslist board. Craigslist has hit back that eBay used its board seat to glean information to launch its own classified site, Kijiji. Craigslist also claims that eBay used deceptive tactics to direct traffic away from its site."
It does happen in some industries, and the law on it is pretty complex and murky (and varies by country). When it's below a certain threshold, so the minority stake doesn't exercise control over the company, and has representation basically only to ensure its rights as a minority shareholder are respected, it's considered a "passive investment" and not subject to the usual antitrust scrutiny that would ensue if, say, eBay actually tried to buy Craigslist (or buy a stake considered controlling). A lot of economists are a bit skeptical of just how passive such passive investments are, though. The keywords +"passive investment" +competitors bring up a whole pile of writing on the subject...
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Craigslist is big in large markets, but in small markets, no one uses it. Kijiji rules the roost in small markets.
IE in my homedown, of about 100,000 people, there are less than 200 posts right now in craigslist ForSale section.
Kijiji has over 24,000.
It is because of the classic dillema that keeps users on Craigslist (despite it being a steamping pile of crap), and keeps people on eBay (despite them charging a fortune). People searching need a critical mass of people selling, and people selling need a critical mass of people searching. It is a self-renforcing monopoloy that is a tough nut to crack.
Craigslist has always been unpopular in small markets, that is where Kijiji got its foothold.
They have a competitor on the board since the competitor elected itself to the board with all the shares which they bought. No one but this competitor is happy with this setup.
The World Wide Web is dying. Soon, we shall have only the Internet.
Craigslist was not selling ownership and ebay bought it from a former Craigslist Employee through a suspicious deal. After how ebay has made numerous decisions at the expense of their users it is hard to believe that they would complain when someone tries to correct something they should not have done in the first place.