(Recasts first paragraph; adds byline, background throughout)
By Gina Keating
LOS ANGELES, April 22 EBay Inc, the world's
largest online auctioneer, sued Craigslist, a competitor in
which it holds an ownership stake, in a dispute over whether
the Internet bulletin board tried to blunt eBay's control.
EBay (EBAY.O) alleged in the lawsuit that the board of
directors of Craigslist, the Web's dominant classifieds listing
service, took "unilateral actions" to dilute eBay's 28.4
percent stake by more than 10 percent, eBay said in a
The suit, filed on Tuesday under seal, asked a Delaware
Chancery Court to rescind the unspecified actions to protect
eBay's stockholders and preserve its stake in Craigslist.
The suit names as defendants Craigslist founder, Craig
Newmark, who runs the company in a famously open-minded style,
and Chief Executive Jim Buckmaster. Newmark and Buckmaster are
the only members of Craigslist's board of directors.
EBay bought a minority ownership stake in 2004, and
launched its own free online classifieds site, called Kijiji,
three years later in the United States.
The two services directly compete in the United States and
about a dozen countries, with Kijiji tailoring its ads to young
families rather than maintaining a Craigslist-style open
In an email, Newmark had no comment on the lawsuit, or on
whether the dispute involved the companies' business rivalry,
saying Craigslist needed "a little time to figure it all out."
An eBay spokeswoman said the disputed board actions
concerned "corporate governance issues" and did not involve
She said eBay could reveal no more about its complaint
without Craigslist's permission to protect information about
privately held Craigslist governed by confidentiality
Shares of eBay closed up 26 cents at $30.89 Tuesday on
(Reporting by Gina Keating; editing by Braden Reddall/Jeffrey