14 DAY TRIAL // Craigslist and eBay are set to fight it out in the court room as a trial between the two companies gets underway in Delaware, US. eBay has filed a lawsuit against Craigslist in 2008 as the two companies argue about eBay's share in the classifieds site. The auctions site claims that Craigslist diluted its stake by issuing new shares, lowering eBay's slice from 28.4 percent to just 24.85 percent which meant loosing its seat on the Craigslist board.
Former eBay CEO Meg Whitman took the stand yesterday in the first day of the trial which is set to last a week. She argued eBay's case saying the company entered with the best intentions and was deeply interested in the classifieds market. eBay bought its stake in Craigslist from a former investor and Whitman says the company paid $16 million for the shares and a further $8 million to Craigslist cofounder Craig Newmark and to CEO Jim Buckmaster for special rights, like veto powers over mergers and acquisitions, as the company wanted to make sure competitors didn't get their hands on it.
"We were very interested in making an acquisition of Craigslist and we would have loved to have bought the whole thing," Whitman told the court. "But we understood early on that was not going to be possible, at least early on." She also said that the company was interested in the market internationally which is why it acquired several companies in the field and launched its own classifieds site Kijiji in Europe in 2005 and two years later in the US as well.
eBay says it came with the best intentions into the deal and wants the court to find Newmark and Buckmaster in violation of corporate law for lowering its stake in Craigslist. The latter company also filed a suit in San Francisco over the same matter claiming eBay didn't disclose the launch of Kijiji and that it used its privileged position as a shareholder to gain inside information into the company and even to lure users towards its own offering.