Online classifieds company Craigslist has tremendous goodwill among those who use the internet. It does not even charge for most of its listings. It is more a charity than a business.
Enter Ebay (EBAY) which made an investment in Craigslist about four years ago. Now, the big auction company has sued the classified company for having a secret board meeting. At that meeting those in attendance cut the percentage of Craigslist that Ebay owned. It appears to have been an act originating from the heart of darkness.
But, it is not so simple and the simpletons at Ebay would have Wall St believe. Ebay has brought its own classifieds business, Kijiji, into the US market. That may have violated a non-compete clause it had with Craigslist. The auction company had also offered to but the piece of Craigslist which it does not own.
Secret meetings are indeed a dirty business. Would it have been better for Craigslist to simply have given Ebay the finger? Probably.
In the overall hierarchy of ethics it is probably worse, much worse, to compete against a company which is supposed to be an ally. That is even more true when a piece of paper says such an action is taboo.
Ebay seems to have put what is legal ahead of what is right.
Douglas A. McIntyre
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