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Craigslist Feared eBay Takeover

It diluted auction giant's shares, triggering last week's lawsuit

By Laila Weir,  Newser User

Posted May 1, 2008 5:10 PM CDT
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(Newser) – Why did eBay sue Craigslist last week? Craiglist's fear of a hostile takeover played a role, the New York Times reports. The relationship between the classified ads site and minority shareholder eBay began to sour after eBay launched rival site Kijiji. Craigslist’s directors smelled a takeover in the offing and reorganized their stock to reduce the auction giant’s holding from 28.04% to 24.85%. EBay lost its right to elect a director—and sued.

The eBay complaint describes a July 2007 email from eBay’s then-CEO to one of Craigslist’s leaders, saying, “We would welcome the opportunity to acquire the remainder of Craiglist we do not already own whenever you and Craig feel it would be appropriate.” This apparently sparked the takeover fears and subsequent reorganization at the classifieds site.

A sign is posted inside eBay headquarters in San Jose, Calif., Tuesday, April 15, 2008.
A sign is posted inside eBay headquarters in San Jose, Calif., Tuesday, April 15, 2008.   (AP Photo/Paul Sakuma)
A shirt for sale at eBay headquarters in San Jose, Calif. is seen Tuesday, April 15, 2008.
A shirt for sale at eBay headquarters in San Jose, Calif. is seen Tuesday, April 15, 2008.   (AP Photo/Paul Sakuma)
An eBay sign at the company's San Jose, Calif. headquarters is seen Oct. 17, 2007.
An eBay sign at the company's San Jose, Calif. headquarters is seen Oct. 17, 2007.   (AP Photo/Paul Sakuma)
EBay mugs are seen on sale at eBay Inc. headquarters in San Jose, Calif., Wednesday, Oct. 17, 2007.
EBay mugs are seen on sale at eBay Inc. headquarters in San Jose, Calif., Wednesday, Oct. 17, 2007.   (AP Photo/Paul Sakuma, file)
An sign outside eBay headquarters in San Jose, Calif. is seen Tuesday, April 15, 2008.
An sign outside eBay headquarters in San Jose, Calif. is seen Tuesday, April 15, 2008.   (AP Photo/Paul Sakuma)
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Reuters on the lawsuit
Reuters

 
eBay • Craigslist • Kijiji • lawsuit • classified ads

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