Craigslist Founder, CEO Accused of $16 Million "Extortion"

Dysfunctional eBay and Craigslist relationship drama better than a nasty divorce case

By Jackson West
|  Thursday, Dec 10, 2009  |  Updated 4:12 PM CDT
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Craigslist Founder, CEO Accused of $16 Million "Extortion"

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Craig Newmark and Jim Buckmaster portray themselves as humble, anti-corporate geeks, but eBay prefers to think of them as extortionists.

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Craigslist likes to paint itself as a mild-manner company of über-geeks just out to help people make personal connections -- with cofounder Craig Newmark telling Wired this year that he'd initially planned to make the company a non-profit, if only there weren't so many pesky rules and forms.

In the continuing trial over dueling lawsuits between Craigslist and minority shareholder eBay, eBay's Garrett Price painted an entirely different picture of Newmark in his testimony yesterday.

Price said that Newmark and Craigslist CEO Jim Buckmaster demanded that eBay pay Craigslist as much as it was paying for the shares of disgruntled former Craigslist investor Phillip Knowlton -- $16 million -- or Newmark and Buckmaster wouldn't let the deal go through.

It's the first public confirmation of the $16 million payoff, which was first reported by Silicon Valley gossip blog Valleywag in 2007. Craigslist has yet to comment on that aspect of the eBay deal.

Price, who argued the demand amounted to "essentially extortion," testified that Newmark and Buckmaster didn't want their personal take from the deal revealed lest it damage the company's do-gooder image.

However, in a cross-examination of eBay counsel Brian Levey early in the proceedings yesterday, Levey admitted that the company used business information from Craigslist operations in order to help eBay's competing online classifieds service Kijiji.

"We used it to benefit our business to the extent it was in compliance" with the terms of the investment deal Levey testified. He collected three years of information and provided it to the team building Kijiji.

The Bay Area hasn't seen a breakup this ugly since the divorce trial of Pat Montandon and Al Wilsey -- and you can watch it all, live, online.

After Price's cross-examination by attorney's representing Craigslist today, Newmark himself is expected to take the stand.

Jackson West wouldn't have split that fare for a cab ride in Manhattan with Craig had he known.

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