In a sign that the classified ad site’s investor relations may leave a little to be desired, eBay is suggesting that Craigslist has ‘unfairly diluted eBay's economic interest by more than 10%’. It bought a 28% stake back in 2004, but now seems to be under the impression that it’s been watered down – although nobody seems to know exactly how.
However, Craigslist is giving eBay short shrift, rejecting the ‘unfounded’ and ‘out of the blue’ allegations. ‘Coming from a shareholder that views Craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives,’ the ad site said darkly in its regular blog. And in case you were wondering what it was hinting at, it went on: ‘eBay has absolutely no reason to feel threatened - unless a hostile takeover of Craigslist, or the sale of eBay's stake in Craigslist to an unfriendly party, is their ultimate goal’, it snarled.
As you can probably guess, the two companies aren’t on the best of terms. eBay got hold of its stake through an ex-employee, rather than via Craigslist itself – and given that a year later it went off and started a competitor site called Kijiji, you couldn’t blame Craigslist for being a bit suspicious of its motives.
On the other hand, as eBay has no doubt discovered, Craigslist is an unusual company. Founder Craig Newmark and chief executive Jim Buckmaster seem to have little or no interest in pumping the site for cash, giving most of its services away for free – so despite the fact that it gets tens of millions of visitors every week (it’s regularly cited as one of the ten most popular on the internet), it’s unlikely eBay has actually made much money from its investment.
And knowing Buckmaster (who is apparently 'possibly the only CEO ever described as anti-establishment, a communist, and a socialistic anarchist'), we imagine Craigslist might have a fairly relaxed attitude to corporate governance. Buckmaster came from the famously alternative University of Michigan, where he used to live like a monk, making his own mittens from purses from used clothing stores. ‘I still don’t have a suit,’ he says proudly. ‘Maybe one day.’ The CEO wears it as a badge of pride that none of the staff has any formal training. ‘Tech staff often resent the activities of business people in an organisation,’ he told MT recently. ‘So it's lucky we have no-one with any business training.' Although maybe if they did, they wouldn't have ended up in a legal spat with eBay...
MT recently caught up with the unorthodox Buckmaster for our regular ‘How Does He Manage’ column. Look out for it in the May issue of the magazine.