EBay sues Craigslist

EBay is suing Craigslist, an online classified advertising network in which the Internet auction company owns a minority interest, news sources reported Tuesday.

San Jose, Calif.-based eBay alleged in a lawsuit filed in Delaware that Craigslist's directors -- founder Craig Newmark and CEO Jim Buckmaster -- took actions that unfairly diluted eBay's economic interest in the company, according to news sources.

In 2004, eBay bought a 28 percent minority interest in Craigslist from an unnamed former executive.

EBay is asking Delaware's Court of Chancery to negate the Craigslist board's actions, but failed to disclose to news sources the specifics of those actions.

For now, the lawsuit is under seal, according to the AP, because of confidentiality restrictions, but eBay says that Craigslist could ask the court to make the complaint publicly available.

The AP further reports that a Craigslist spokeswoman said the company would likely post a response to the lawsuit later Tuesday on its Web site.

Craigslist has become a powerhouse site for advertising real estate listings, with more and more agents turning to the site for added exposure to buyers looking online. Property listings are free to list on Craigslist in all markets except New York, where brokers must pay $10 per listing.

The classifieds site recently put forth a proposal to limit the HTML that can be used in listings as a way to help ward off spam. Some real estate folks have been discussing the proposal and how it would impact various real estate listings services should it go through. Join the discussion at this link.

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