craigslist blog

Navigational searches on Yahoo for “www.craigslist.org” or “craigslist.org” have been bringing up eBay textads featuring hyperlinked craigslist URLs, designed to confuse and misdirect users seeking craigslist onto eBay sites. Here is a link to a screen shot of one such search taken this morning, and an image of the text ad itself:

We’ve tried to give eBay the benefit of doubt, but it’s hard to reconcile deceptive, trademark-infringing ads calculated to harm craigslist and its users with statements like this one from eBay yesterday:

“eBay has, and will continue to be, a minority shareholder who believes in Craigslist, shares its values and acts with openness, honesty and integrity in its dealings with Craigslist’s board and the online community.

In fact, these ads suggest that they do not share our values at all, and that they are being anything but open and honest with the online community

UPDATE - Looks like these ads have been withdrawn! Ceasing unlawful behavior out of fear of legal consequences falls short of “openness, honesty, and integrity”, but it’s a step in the right direction.

We filed a complaint in California today, charging eBay with unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.

Full text of complaint is available in PDF or HTML

Although our response to each of Ebay’s unfounded claims will have to wait, it’s worth pointing out that Ebay is suing us for implementing protections for craigslist that it clearly believes are perfectly appropriate for protecting itself, for example:

1. Ebay is suing us for implementing a shareholder rights agreement, which it has called a “poison pill”. Here is a 2004 filing by Ebay regarding an increase in authorized shares, which it reserves the right to use for the purpose of implementing a poison pill:

http://sec.edgar-online.com/2004/05/17/0000950134-04-007721/Section9.asp

2. Ebay is suing us for offering each of our shareholders the opportunity to exchange their shares for an incrementally larger number of shares bound by a “right of first refusal” agreement, whereby shares must be offered to craigslist on the same terms offered to any other potential acquirer. It had previously insisted that craigslist shareholders be bound by a right of refusal agreement, and has from time to time bound shareholders of Ebay and its various subsidiaries by right of first refusal agreements.

3. Ebay is suing craigslist for implementing an indemnification agreement, which calls for craigslist to pay legal fees for craigslist directors and officers should they be sued individually in the course of their duties. Here is a 1998 filing by Ebay regarding a similar indemnification agreement for its own directors and officers;

http://www.secinfo.com/dut49.71xp.7.htm#1stPage

4. Ebay is suing us for implementing staggered board elections. Here is a 1999 filing by Ebay indicating that Ebay itself is no stranger to staggered board elections:

http://sec.edgar-online.com/1999/04/20/16/0001012870-99-001210/Section5.asp

The public version of Ebay’s claims is now available.

We will file our formal response in the next few weeks, and until then will do our best to abide by protocol in not responding to specific assertions made in Ebay’s complaint.

As those who know us best will recognize, every measure we have taken has been for the sake of protecting the long term well-being of the craigslist community.

Sadly, we have an uncomfortably conflicted shareholder in our midst, one that is obsessed with dominating online classifieds for the purpose of maximizing its own profits.

It’s a conflict of interest worth keeping in mind if you decide to give this filing a read.

We really appreciate the outpouring of encouragement we have received in the last few days from craigslist users, from Ebay users, and from the general public.

Especially touching have been the messages of support from Ebay employees, one of which I’ll share here:

As an engineer at ebay, all I could think when I saw the news was, “Surely, there’s another place to work.” Frankly, I doubt that CL is always right about everything, but for eBay to sue CL is off the charts stupid. eBay had no business grabbing that 25% in the first place. It’s a shame, because my co-workers are really nice, sweet people. But it’s as if I am working for ********* or something. I feel dirty. I’ll be updating my resume this weekend.

For anyone interested in recent press coverage, here is an MSNBC article from earlier today.

Ebay has filed suit against craigslist and its board of directors:

http://news.ebay.com/releasedetail.cfm?ReleaseID=305980

We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us.

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.

Ensuring the future well-being of craigslist and the craigslist community is admittedly very important to us. But Ebay has absolutely no reason to feel threatened here — unless of course they’re contemplating a hostile takeover of craigslist, or the sale of Ebay’s stake in craigslist to an unfriendly party. (In which case, they’re out of luck.

For our part, we have always treated Ebay very fairly as a minority shareholder, and plan to continue doing so, despite this unfortunate development.

Addendum in response to commenter question - To be perfectly clear, Ebay’s stake in craigslist has not been “unfairly diluted” as they have claimed.

ConsumerAffairs.com has a nice story today, covering our answer to the Connecticut Attorney General’s recent defamatory remarks regarding craigslist, here is an excerpt:

Craigslist is on absolutely solid ground and should be given an award instead of being threatened by political officeholders who are paid to know better,” said ConsumerAffairs.com President James R. Hood. “Craigslist provides an invaluable public service at no cost to the vast majority of its users, which is a lot more than the State of Connecticut can say.”

“Throughout the land, corporate interests and reckless politicians are trying to subvert the First Amendment rights of American citizens by stifling free expression on the Internet while the large media companies who should manning the barricades sit idly by,” he said.

“Internet sites provide a means for citizens to speak freely, providing an important and Constitutionally-protected balance to the constant barrage of corporate propaganda and government hogwash,” Hood said. “Those paid by the public to uphold the Constitution should do their jobs instead of putting the iron boot of the state where it doesn’t belong.”

I’m getting some well-deserved flak for a ham-handed cease-and-desist email I sent to a blogger recently. The dialogue had remained cordial until he revealed his business model - running deceptive textads such as the ones below, which got on my nerves:

He pulled the ads before sharing his story (and my emails) with the press, but not before we’d taken some screenshots. When it comes to following up with Ebay, Livedeal, TableForSix, I should probably leave the C&Ds to the professionals.

Fwiw, we have no interest in shutting down blogs about craigslist, critical or otherwise, and have never tried to do so. But in the strange world of trademarks and copyright, it’s poor practice to allow a confusingly similar domain or business name to go unchallenged. Given all the inquiries we’d gotten from reporters thinking this blogger was associated with craigslist, taken together with the deceptive textads and disrespect for our trademark and terms of use, we felt we had to act.

But there was no need for me to act like a jerk, provoked or not.

The Connecticut Attorney General, Richard Blumenthal, recently denounced craigslist to members of the media, for what he alleged were shortcomings in the “erotic services” section of craigslist for areas of Connecticut.

We were disappointed that he chose to ignore our recent progress in dramatically improving compliance with our terms of use, shocked at the bizarre assertion that we are “stonewalling”, and frankly stunned to hear craigslist recklessly slandered as “profiting from prostitution“.

We welcome feedback from any and all interested parties as to how we can improve, but craigslist will not be used as a punching bag for false and defamatory statements.

Unlike the telephone yellow pages, many newspapers, and countless websites, which for many years have profited from “erotic service” ads, craigslist derives no revenue (let alone profit) from “erotic services”, and in fact we incur significant costs in enforcing our terms of use regarding these ads.

Connecticut craigslist users are no doubt curious as to why their AG is spending time attacking freedom of speech and law-abiding companies that provide much-needed free services to the people of Connecticut, when there is so much actual crime left unaddressed. We don’t have the answer, but would be interested to know what it is.