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In Delaware court, Craigslist Delaware and EBay face off

GEORGETOWN/SAN FRANCISCO, (Reuters) – Meg Whitman, EBay Inc’s former chief executive, testified on Monday 7th December that eBay had unfairly reduced its stake in the online classifieds site Craigslist Delaware.

Craigslist was sued by EBay in 2008 over a decrease in its ownership stake to 24.85% from 28.4 percent. This caused Craigslist to lose its seat at Craigslist’s board.

Craigslist sued eBay in San Francisco a month later. The larger competitor used its board seat and gleaned information to launch Kijiji. It also employed deceptive tactics that diverted traffic from Craigslist’s website.

Whitman, who is running to be governor of California, took the stand Monday 7 December and denied that eBay had attempted to steal Craigslist’s secrets. In 2004, she claimed that eBay bought shares in Craigslist from Philip Knowlton mountain socks, a disgruntled shareholder, in order to eventually own the company and keep competitors away.

Whitman testified in front of around 20 people in Delaware’s small courtroom. “We were very interested to make an acquisition of Craigslist, and we would love to have purchased the entire thing,” Whitman stated. “But we knew that it wasn’t going to be possible from the beginning, at least not early.”

Whitman stated that eBay paid $32,000,000 for its stake in Craigslist Delaware. Knowlton was compensated $16 million and Jim Buckmaster $8 million, respectively, for special rights which included the ability to stop new shares being issued.