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EBay Buys 25 Percent Stake in Craigslist Network

Posted on: Friday, 13 August 2004, 06:00 CDT

By MAY WONG

SAN JOSE, Calif. (AP) -- Online auctioneer eBay Inc. (EBAY) said Friday it purchased a 25 percent stake in craigslist, a popular online network of classified ads and forums.

Financial terms of the deal weren't disclosed. The stake was purchased from a former craigslist employee who first contacted eBay with the proposed sale, craigslist officials said.

The auction giant in turn approached craigslist, which has prided itself on being a profitable, community-driven, privately run business and maintains it is not looking for corporate buyers.

"Craigslist has never sought any outside money, and that's not going to change," said Susan MacTavish Best, a spokeswoman for the San Francisco-based network.

Both companies cited common philosophies and business synergies.

"Like craigslist, eBay is about helping folks get everyday stuff done," Craig Newmark, craigslist founder and chairman, wrote in his Web log Friday. "Basically, we're both about building community, and humanizing and democratizing the 'Net, and there's gotta be more of that."

EBay, the world's largest online auctioneer, said it hopes to learn from craigslist more about the classifieds business. The deal is not a response to efforts by other online giants, such as Yahoo Inc. (YHOO) or Google Inc. (GOOG), to better localize their content, said eBay spokesman Hani Durzy.

"We're interested in (craigslist) as a community-driven business and for their emphasis in classified trading, which we think is complementary to what we do," Durzy said. We will "share knowledge, expertise and resources, if necessary."

Craigslist is an online meeting place for people looking to meet others, find a job, or locate an apartment as well as trade in such goods as tickets, furniture, cars and sporting goods.

Newmark, a former IBM programmer, founded craigslist in 1995 as a roundup of local events in San Francisco, but the bare-bones site fast became a popular online destination and has branched out to 45 cities in North America and Europe, with dozens more posted to a waiting list.

Each month, craigslist posts more than 2.5 million classified ads and more than 100,000 new job listings, and gets more than 1 billion page views and 5 million unique visitors per month, craigslist officials said.

EBay said it doesn't expect its investment in craigslist to affect financial guidance for the third quarter of fiscal 2004.

Shares of eBay were down 68 cents at $76.83 in afternoon trading on the Nasdaq Stock Market.

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On the Net:

Craigslist

EBay

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