May 14, 2008
When community values aren’t enough
Anyone looking for juicy new details today about the in-fighting between craigslist and eBay would have been sorely disappointed.
As expected, craigslist countersued eBay after itself being sued for allegedly trying to reduce the influence that the internet giant has as a large shareholder of the classified advertising concern (we wrote about it earlier this week, here.)
Lawsuits are often the place where you get a behind-the-scenes look at how messy corporate break-ups like this really work. In this case, though, there have been few vicarious thrills.
eBay, which bought its 28 per cent stake from a former craigslist employee, courted the company hard to try to enhance its rights as a shareholder, according to the lawsuit. Meg Whitman, former eBay CEO, apparently first buttered up craigslist’s controlling shareholders (founder Craig Newmark, pictured above, and CEO Jim Buckmaster) with the tale of how her own son found an apartment on their website. She played on the fact that both companies thrived by building strong communities. Then eBay won them over by putting its own founder, Pierre Omidyar, on their board. What sealed the relationship, according to the craigslist lawsuit:
“[Newmark and Buckmaster] believed that Mr Omidyar had a moral compass very similar to their own.”
How touching. Now the craigslist duo have decided that eBay is not so cuddly after all, accusing it of “unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.”
That’s quite a laundry list. Newmark and Buckmaster frequently seem to play on their public image as well-meaning innocents in an online world increasingly dominated by unfeeling corporate powers, but it seems they can at least play legal hardball with the best of them.
To be fair to Craigslist they only took legal action after eBay set their dogs of law loose. Craigslist is one of the few big players on the net to have clung to its altruistic manifesto (though Google have not done badly considering how huge they’ve become - privacy concerns aside). eBay on the other hand has been about community in the same way that Vlad the Impaler had warm, fuzzy feelings for the people of Transylvania. eBay has a superb business model. But let’s not pretend that eBay is about anything other than maximising both its market dominance and its profits. Meg Whitman is not cuddly - she’s a businesswoman first and last. All power to Craigslist. eBay may think Craiglist is the holy grail - but they’ll find that it’s full of water from a well they’ve poisoned if they go down this route. Microsoft has learned the hard way that bad PR damages the brand - eBay’s position on the net is far more exposed than is MS’s in software. Setting up a new ethical eBay would be fairly easy. eBay should beware.
Posted by: Jonathan | May 14th, 2008 at 9:04 am | Report this comment