GEORGETOWN, Del. Dec 10 An eBay Inc (EBAY.O)
executive said on Thursday the auction company bought a stake
in Craigslist partly to block rival web company Google Inc
(GOOG.O) from acquiring the classified ads business.
"That was a consideration," said Garrett Price, who was
eBay's principal deal maker in its $32 million agreement to
acquire a 28.4 percent stake in Craigslist in 2004. He spoke
under cross-examination in a trial taking place in Delaware.
Earlier in the week, eBay founder Pierre Omidyar said
Craigslist's founder Craig Newmark seemed distressed by his
dealings with an unnamed party that was in talks to buy a stake
in Craigslist, but was "hostile to its mission."
Newmark is expected to take the stand later on Thursday to
defend the classified ads company against accusations that it
unfairly diluted eBay's stake in Craigslist and stripped it of
a board seat.
Newmark will likely face questions about the negotiations
that led to eBay Inc's stake in Craigslist, which has become a
top website for selling everything from unwanted appliances to
Ebay bought its stake from Philip Knowlton, a disgruntled
former Craigslist employee, in the hopes of acquiring the
entire classified site company.
Meg Whitman, a former eBay chief executive, said her
management team identified classifieds as an important area to
expand and originally considered Craigslist as eBay's "play in
Whitman said eBay hoped to form a bond with Newmark and
Chief Executive Jim Buckmaster and eventually convince them
eBay would make a "good home" for Craigslist.
Emails among eBay executives have showed a culture clash
between the companies right from the start. The emails were
introduced in court as evidence and as a basis for
While eBay executives focused on "monetization" in their
dealings with Craigslist, testimony portrayed Newmark and
Buckmaster as protective of their company's identity as a
Emails showed eBay executives considered the relationship
with Craigslist as "dead" within a year of becoming a
Emails also showed eBay executives expected they would
violate provisions of their shareholder agreement with
Craigslist when eBay launched its own U.S. classified ads
business, Kijiji.com, and anticipated losing their Craigslist
board seat as a result.
Craigslist has sued eBay in San Francisco, saying the
larger rival used its board seat to glean information for
developing Kijiji, and employed deceptive tactics to direct
traffic away from Craigslist's site.
EBay executives told the court some of the Craigslist
information was used to evaluate Kijiji's potential but have
dismissed any suggestion that Craigslist had a "secret sauce,"
beyond "local, simple and free."
The trial is being held in Delaware, where Craigslist is
incorporated, and is being broadcast over Courtroom View
The case is eBay Domestic Holdings Inc v Newmark, et al,
Delaware Chancery Court, No. 3705-CC.
(Additional reporting by Alexandria Sage in San Francisco)
(Reporting by Thomas Hals, editing by Dave Zimmerman)