Who comes out looking good in the first of the two EBay versus Craigslist trials? Frankly, no one so far.
Based on the testimony of EBay executives — Craig Newmark and Jim Buckmaster of Craigslist are due up today or tomorrow — EBay knew that Craigslist would object to having a part-owner as a direct competitor. Well, that’s no surprise; who wouldn’t object to having a part-owner also sitting on your board of directors and receiving your confidential financial information while figuring out how to beat your brains out? EBay says it acted fairly and appropriately, and kept Newmark and Buckmaster informed of its plans. But documents introduced in court show that it worked hard to fudge or obfuscate its plans, even while keeping Craigslist informed at the last possible minute.
And in the case of the $16 million paid to Buckmaster and Newmark for an agreement in relation to the $16 million payment to former Craigslist shareholder and employee Philip Knowlton for his shares, both sides look pretty bad.
Newmark and Buckmaster — both of the “we’re not a business, we’re a community service” mantra — received $8 million each to reach an agreement with EBay on the rules of engagement. So much for “community service.” That’s a giant chunk of money for guys who claim not to care about the money. Perhaps, even, they’re entitled to a payment. Hey, Craigslist is a business; why shouldn’t they get paid? But then don’t feed the baloney of “aw shucks, we don’t care about competition and we’re just community servants” as you deposit millions into your bank account. Especially — especially! — if you take “great pains to avoid it being disclosed” that you got the $8 million payment. So much for the “aw shucks” boys!
And EBay? Garrett Price, who was one of the leaders in the deal, said the $16 million paid to Newmark and Buckmaster was “extortion.”
If someone’s trying to extort money from you, should you pay it? Especially if they wanted it kept secret “because they felt it would taint their altruistic names and their reputation to the community as community-focused philanthropists would suffer”? If it’s extortion, you just don’t pay it. Period. The reality is, the payment may be cast as “extortion” now, but Buckmaster and Newmark could certainly claim that they gave up certain rights in exchange for the payments and that their requests were entirely legitimate. But if so, why did they want to keep them secret?
All in all, it’s kind of ugly. Just like the underbelly of business in many ways. But for Buckmaster and Newmark to claim publicly that they don’t care about competition or run their business as a business, and then take secret payments and fight to block competition, is exposing that the two hippie altruists may not be such hippie altruists after all.