Craigslist-eBay legal battle takes to mudslinging

WILMINGTON, USA: Craigslist's chief executive told a court on Monday that an executive with eBay, a minority shareholder, warned him to improve relations with eBay's then-CEO Meg Whitman because she could be a "monster" and "an Evil Meg" when frustrated.

Craigslist's Jim Buckmaster testified that eBay Inc's dealmaker, Garrett Price, cautioned in an email that Craigslist was driving Whitman "to distraction" seven months after the auction company became a shareholder.

"He said he needed to tell me there were two Meg Whitmans. We had met and reached an agreement with Good Meg. There was another Meg, an Evil Meg. We would be best served to know that Meg could be a monster when she got angry and frustrated," Buckmaster told a court in Georgetown, Delaware.

Price later denied the allegations.

"Today's testimony by Jim Buckmaster concerning comments I allegedly made about Meg Whitman was false and malicious," he said in a statement.

EBay is suing to restore its stake, which Craigslist diluted to 24.85 percent, to 28.4 percent and to regain its board seat in Craigslist, where it became a shareholder in 2004.

In a week's worth of testimony in Delaware Chancery Court, executives from two of the most prominent Internet companies testified to a series of missteps and betrayals that led to the unraveling of their relationship.

A ruling on the case may come as early as January.

EBay said that after it launched the Kijiji online classified business in 2007 in the United States, where Craigslist is the dominant player, Buckmaster hatched a "coercive plan" to dilute eBay's stake and eliminate its board seat.

Craigslist, meanwhile, has sued eBay in San Francisco, saying the larger rival used its board seat to glean confidential information about the classified ad business.

Buckmaster, who began testifying late on Friday, was the sole witness on Monday, and was questioned for more than five hours by Craigslist's attorney.

Much of the hearing was dedicated to questions about eBay's access to and use of confidential Craigslist information.

Buckmaster also described an eBay proposal for international cooperation, and Craigslist's counterproposal, in the months after eBay became a shareholder.

Price's warning to Buckmaster about Whitman was apparently aimed at speeding up the talks about cooperation, but the two companies never agreed on a joint overseas plan.

EBay bought its stake in Craigslist in 2004 from Philip Knowlton, a disgruntled former Craigslist employee.

Whitman, who is now running for Governor of California, testified last week that she had considered Craigslist her company's "play" in classifieds, an area she expected to grow rapidly.

An email that was introduced on Monday as a basis for questioning seemed to highlight eBay's frustrations. The Craigslist business was a "rocket ship" that was "doing fantastic," wrote an eBay executive in March 2005.

However, in the same message the executive described a meeting with Buckmaster as "quite an experience" and said Craigslist's staff were "definitely from another planet."

The hearing adjourned until Tuesday, when eBay's attorney is expected to cross-examine Buckmaster.

The trial is taking place in Delaware, where Craigslist is incorporated, and is broadcast over Courtroom View Network.

The case is eBay Domestic Holdings Inc v Newmark, et al, Delaware Chancery Court, No. 3705-CC.