eBay Vs. Craigslist Scandal

In mid-April of 2008, the online auction powerhouse eBay filed a lawsuit against Craigslist and two of its executives in a Delaware court for diluting eBay's investment in the company. Exactly four years ago, eBay was granted a little over a quarter of Craiglist's ownership (28 percent) to try and help the company gain elite status in the online auctioning industry. This proposal was suddenly questioned by Craigslist in July of 2008 when eBay launched another classified ad service named Kijiji which was publicly stated as a competitor to Craigslist.

"Yes, Craigslist is a competitor, but we feels there's room for two or more classified sites, and we plan to bring our expertise of bringing buyers and sellers together from eBay to Kijiji," stated Hani Durzi, an eBay director of corporate communications.

With this statement issued, Craigslist felt threatened and minimized eBay's economic interest by more than 10 percent taking away mostly all control they ever had in their share of Craigslist.

So what exactly is eBay suing Craigslist for? Not only does eBay believe Craigslist unfairly and unreasonably lowered their shares, they feel that Craigslist's chief executive adopted unspecified measures that put eBay and its investments to a disadvantage.

There is so much more going on between these two internet companies than any one person is aware of so people can only make judgments based off the concrete facts known so far. eBay is by far the most popular internet selling and buying company known nationwide and Craigslist is probably a close second. In my personal opinion, I think it was wrong for eBay to announce that it had created a new online auction company in Kijiji that was made primarily to compete with Craigslist. This statement makes Craigslist have to worry about the future of its company so it took action against eBay and the role eBay plays in its company. The legal issues are too complex to come to a complete conclusion but if I were to make a final decision, I would say that Craigslist has a right to dilute eBay's share within their company because of the establishment of Kijiji and eBay's comments about its new online auction company.