Wednesday, April 23, 2008
eBay sues Craigslist... no really
So I woke this morning to the usual headlines, Hillary did this, Obama did that in the PA primaries, blah blah blah. But, when I headed over to my favorite tech news sites (Slashdot, Techmeme, news.ycombinator.com, and TechCrunch) I stumbled across a most confounding of tales.
Online auction giant eBay is suing Craigslist. As if that didn't raise enough questions on its own, the reasons for eBay's suit only add confusion to the mix. Normally I can read most news stories and pretty much have the ins and outs of them down pat. This one, not so much.
First, at some point in the history of Craigslist (in 2004 to be precise), someone sold eBay their share of %28 in the company. Ok, so maybe some guy or gal was offered a lot of money by eBay to buy them out, fair enough. That's how a free market works. But %28? Why did eBay even bother? The company that was Craigslist was, and is a small group of people. Ebay must have known that they wouldn't be able to get a controlling amount of stock. To this day the company is still privately held.
Ok, fast forward to 2008 and eBay is saying that Craig Newmark (hence CRAIG'slist) and Jim Buckmaster intentionally acted to dilute eBay's economic interest in Craigslist by more than 10 percent. Now, I'm no slouch, but I also don't have a degree in economics or finance. Would someone mind translating that into something the general public can understand?
Why in the world would the behemoth that is eBay, the same company that had enough capital to buy (and now sell) Skype, want to sue a company that still operates out of Victorian houses in San Francisco? Is it the money? I doubt it. It would seem that eBay could only have one possible motive, and as Craigslist said on their blog today eBay sees them as a main competitor. As a person who has done business on eBay, I've gotten the feeling over the past year or so that the powers that be want to exercise more and more control (not to mention fees) over the way things are bought and sold. Craigslist on the other hand, is a free for all. Think of it as WalMart vs. the flea market.
I really don't see the logic behind any of eBay's actions regarding Craigslist. Guess we'll have to wait and see what happens next. While I'm at it, does anyone want to buy a corn chip that looks like Abraham Lincoln?