Online auction giant EBay has recently acquired a 25 percent stake in San Francisco classified advertisements Web site Craigslist.
The deal will allow EBay and to share expertise and resources, the companies say. Terms of the deal were not disclosed.
Local Site Goes National
Craigslist was founded in 1995 as a free classifieds Web site for the San Francisco area. The site now serves 45 cities worldwide including New York, Toronto, and London--and it's still expanding. Craigslist includes listings for jobs, housing, personals, and events. The site also serves as a clearing house for goods people want to buy, sell, or trade.
"The deal we're announcing today basically allows us to operate without changing our mission of community service, while making available to us expertise and resources we could really use," Craigslist founder and chairman Craig Newmark writes in a posting on his personal Web log.
EBay confirms that as a minority shareholder, it does not expect to get any control over Craigslist. "Craigslist will continue to run their business as they see fit," says EBay spokesperson Hani Durzy. "EBay is a minority shareholder."
EBay's primary reason for taking a stake in Craigslist is to learn more about the classifieds model that has been so successful for Craigslist, according to Durzy.
"There seems to be something really powerful about the classifieds model in certain areas. It is something that we're going to be able to explore as part of this acquisition," Durzy says.
EBay purchased the shares from an individual Newmark worked with and had given part ownership to. When the unnamed man left the company and decided to sell his shares to EBay, Newmark and his associates met with EBay and came to an agreement.
"Although I never figured that part of Craigslist might be owned by a public company, Meg Whitman and Pierre Omidyar showed that they were interested in us for all the right reasons," Newmark wrote on his Web log. Whitman is president and CEO of EBay, Omidyar is EBay's founder and chairman.