Craigslist CEO Jim Buckmaster testified Friday that he would never have agreed to do business with eBay if he knew in 2004 what he knows now about how eBay executives do business.
Under questioning by Craigslist counsel Michael Clyde of Perkins Coie, Buckmaster said that as the relationship between the two Internet giants grew increasingly sour, his mind kept returning to the assurances he had received from former eBay CEO Meg Whitman in the 2004 meeting that cinched the deal in which eBay acquired a 28 percent minority stake in Craigslist for $32 million. But eBay’s decision to launch Kijiji, an online classified site that directly competed with Craigslist, Buckmaster said, led him to question whether Whitman was “trustworthy.”
Much of Buckmaster’s testimony focused on a pair of CEO-to-CEO e-mails that presaged the court battles to come. Buckmaster sent the first one to Whitman on July 12, 2007. In the e-mail, he said that eBay’s launch of Kijiji had made it clear that the two companies had differing ideas about competition. And while that was “perfectly fine generally speaking,” Buckmaster wrote, “[it] does not feel right coming from a large shareholder privy to our financials and other confidential information.”
“It is my sad duty to report that we are no longer comfortable having eBay as a shareholder,” Buckmaster wrote, explaining that Craigslist wanted to “explore options for our repurchase, or for otherwise finding a new home for these shares.”
Buckmaster testified that Whitman’s response, sent July 23, 2007, was oddly nonresponsive. “We are so happy with our relationship with Craigslist, that we could neither imagine doing anything to disturb our personal rapport with you or [Craigslist founder] Craig [Newmark], nor parting with our shareholding in Craigslist Inc. under any foreseeable circumstances,” Whitman wrote. “Quite to the contrary, we would welcome the opportunity to acquire the remainder of Craigslist Inc. we do not already own whenever you and Craig feel it would be appropriate.”
Buckmaster testified that he considered Whitman’s acquisition offer to be “threatening.” He testified that he interpreted Whitman to mean that eBay was intent on owning a controlling stake in Craigslist, “if necessary, over our dead bodies.”
Clyde asked what conclusions Buckmaster drew from the e-mail. “She was going to turn her back on us–on promises she had made to us,” Buckmaster testified. “This was a slamming of the door in the face.”
Buckmaster’s testimony will continue Monday.