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eBay seeks annulment of Craigslist divorce

Divorce is messy, as eBay and Craigslist are discovering.

EBay is suing Craigslist, the top US classified ad website, for diluting its shareholding...

Divorce is messy, as eBay and Craigslist are discovering.

EBay is suing Craigslist, the top US classified ad website, for diluting its shareholding and invoking a "poison pill" to stop eBay from selling its shares to anyone other than Craigslist. eBay hopes to have Craigslist's actions set aside and have its seat on the board reinstated.

Craigslist took the steps after eBay launched a competitive website called Kijiji.

Craigslist founder Craig Newmark told a Delaware court he had believed former eBay CEO Meg Whitman and other eBay executives when she said in a 2004 meeting that eBay shared Craigslist's core values.

He changed his mind after eBay launched Kijiji, Reuters reported. "Basically this (was) the equivalent of a 'Dear John' letter. You thought you were dating and they show up with someone else," he said.

eBay paid $32m for a 28% share and a seat on Craigslist's board. Newmark alleged that eBay used its seat to gain inside knowledge that helped it launch Kjiji.

The US Courtroom View Network is reporting the trial.

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