EBay embarrassed by email revelations

 

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By Reuters

Posted on 9 Dec 2009 at 09:02

Court documents have revealed how eBay tried to play down the launch of classified-ads site Kijiji, even while it was sat on the Craigslist board.

According to emails passed among eBay executives, they were told to feign surprise if Craigslist board members reacted negatively to news that eBay was launching its Kijiji classifieds site.

Former eBay executive Josh Silverman, who ran the company's international classifieds business and temporarily sat on the board of Craigslist in 2007, took the stand in a Delaware court on Tuesday, the second day of trial.

Craigslist's attorneys showed in court an email sent to Silverman in January 2007 from eBay's corporate counsel, Brian Levey, that suggested Levey take Silverman's seat on the Craigslist board to avoid any illusion of impropriety, given the imminent launch of Kijiji.

If we're going to compete, perhaps it's cleanest to have me be the board member since they'd have a much tougher time alleging that I'm using any confidential information to benefit our business

"If we're going to compete, perhaps it's cleanest to have me be the board member since they'd have a much tougher time alleging that I'm using any confidential information to benefit our business," wrote Levey.

"Right, that could be true. However I'd expect that we would lose our Board seat right away, no?" responded Silverman, according to the email shown in court.

An email sent in January by Silverman to another eBay executive revealed Silverman's hesitancy to announce the launch of Kijiji without first informing Craigslist.

"Do you have any more clarity around timing for making a decision on a US entry into classified?" read the email. "I wouldn't want to have a board meeting and then shortly after announce an entry. Would look strange."

"Feign Surprise"

EBay ultimately informed Craigslist Chief Executive Jim Buckmaster, in June 2007 of its decision to launch Kijiji. Silverman summarised his 19 June, 2007 phone call with Buckmaster informing him of the competing launch in an email titled "Talking Points for Call."

"I tried to present the information in a low-key and humble manner ('with 29 free classified sites out there, we're not saying that adding a 30th is going to have a huge impact, especially given what great traction CL has ...')" read the email.

"I'd recommend that we continue the low key tone where we don't expect them to be concerned or upset (and express surprise if they do) and see how that plays out," according to the email presented in court.

The case surrounds eBay's minority stake in Craigslist, the largest US online classifieds site. EBay sued Craigslist in Delaware in 2008, claiming the company diluted its stake from 28.4% to 24.85%, thereby denying eBay a seat on its board.

Craigslist then sued eBay in San Francisco, claiming that eBay used its board seat to glean confidential information it used to launch its own classifieds business.