Page last updated at 22:45 GMT, Tuesday, 13 May 2008 23:45 UK

Craigslist strikes back at eBay

Sign in eBay office
EBay owns a small part of Craigslist

Online ad site Craigslist has filed a countersuit against business rival eBay, alleging it used its minority stake to steal trade secrets.

In a complaint filed in a California court, Craigslist challenged allegations made by eBay in April.

EBay is suing Craigslist to "safeguard its four-year financial investment", claiming Craigslist executives took actions to dilute eBay's stake.

Craigslist has accused eBay of competing illegally.

The countersuit says eBay violated trademarks and used misleading advertising on Google to run ads for its rival Kijiji site that appeared to be Craigslist ads.

The lawsuit demands that eBay restore all shares of Craigslist owned by eBay or for the court to require eBay to divest its holdings in Craigslist.

The suit also asks for a cut of eBay profits and for punitive damages.


EBay claims that Craigslist's founder Craig Newmark and its chief executive Jim Buckmaster adopted unspecified measures in January that have disadvantaged eBay and its investment.

EBay acquired a 28.4% stake when it bought shares from a former employee who had been given equity by Mr Newmark.

Mr Newmark and Mr Buckmaster give away for free most of the services that Craigslist provides.

They have always appeared to have little ambition to milk profit from the popular site, which offers everything from houses for rental to nannies for hire.

A year after the deal was completed, eBay, which had said it wanted to learn from Craigslist, started, a rival international network of classified ad sites that now sells ads in all 50 US states.

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