[koeselitz]

It's two different things when you buy shares specifically in order to try to destroy the company you're buying shares in. It's pretty obvious that's what Ebay was trying to do, and it's not weird or strange for Craigslist to want to keep that from happening. Frankly, it's sort of surprising to me that there aren't laws in Delaware against hostile shareholding, but it guess it is Delaware; there's a reason most corporations choose that state as a base.

[MichaelApproved]

You say it's pretty obvious what ebay was trying to do but it's not obvious to me and I can't see the evil in their intentions. What were they doing that was going to destroy the company?

[koeselitz]

Well, without getting into any specifics, isn't the fact that craiglist and ebay are direct competitors in an incredibly heated market enough to indicate that some tension was inevitable?

I think it's important to point out that craigslist has spent the past few years steadily eroding ebay's market. Essentially, craigslist has done to ebay what google has done to microsoft on the email and document fronts; craigslist offers a service that does pretty much what ebay does, only it does it for free, and it's often more convenient to boot. As far as I know, ebay has seen the impact of this materially in their profits; the growth of craigslist has been explosive over the past few years.

A parallel example: how would people have reacted if, after the introduction of the iPod in 2001, Microsoft had bought out several controlling members of Apple's board of directors? Would Steve Jobs have reacted combatively? I'm sure he would have; in fact, I would be surprised if he didn't. That's not to say that craigslist isn't guilty of some particular mistakes here, but at least they're understandable mistakes.

[gojomo]

Have you read Craigslist's countersuit?

http://blog.craigslist.org/2008/05/unlawful-and-unfair/

Craigslist alleged eBay specifically put key managers of eBay's Craigslist competitor, Kijiji, into the Craigslist board seat.

Here, also, is better coverage of the decision:

http://www.bloomberg.com/news/2010-09-09/ebay-wins-lawsuit-a...

It wasn't a rout for eBay; the judge seems to have agreed with Craigslist on the critical issue of a board seat for eBay:

On the question of EBay’s seat on Craigslist’s board, Chandler found that the agreement covering EBay’s investment didn’t guarantee it a director’s spot.

The agreement specifically stated that if EBay started competing with Craigslist in the U.S. market for classified advertising, the minority shareholder couldn’t stop efforts to remove the board seat, Chandler said.

EBay’s claims over the seat amounted to an “attempt to obtain a permanent board seat through litigation, when it could not obtain a permanent board seat through arms-length negotiations,” the judge said.