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eBay Buys 25 Percent Stake in San Francisco-Based Web Site Craigslist
San Jose Mercury News 08/14/2004
Aug. 14--Craigslist, the San Francisco Web site that has endeared itself to users with its free, eclectic classified ads, has struck an unexpected partnership with one of the most profitable e-commerce operations in the world: eBay.
Craigslist said Friday that the San Jose online auction giant has acquired a 25 percent stake in the company from a former business partner of founder Craig Newmark. Terms of the deal were not disclosed, but craigslist said it received none of the sale proceeds.
Craigslist and eBay will share resources and expertise, but they will not merge their operations or otherwise immediately change how their respective Web sites function.
"This is not a sale of craigslist to eBay," said craigslist Chief Executive Jim Buckmaster. "This is about a shareholder changing hands. And we're quite pleased it ended up being eBay, to put it mildly."
The news stunned some craigslist users, who characterized the deal as a clash of cultures and accused Newmark of selling out.
"This is a gigantic mistake," Gary Allen wrote in a user forum that craigslist set up to discuss the deal. "It's impressive that even to this day an average citizen can write to Craig and get a personal reply. Unfortunately, that same personal and human touch is sorely missed at eBay. This is a mistake. eBay bad and robotic, Craig's List human and good."
Craigslist executives said the deal is nothing close to selling out. EBay owns just a minority stake in the company. And craigslist has no immediate plans to change how it operates.
"They don't have an interest in trying to change our mission," Buckmaster said of eBay officials. "They like us the way we are."
An eBay spokesman agreed. "There are no plans we're talking about for specific changes," said Hani Durzy. "We are a minority shareholder, so they will continue to run their business as they see fit."
EBay Chief Executive Meg Whitman has spoken with admiration of craigslist in the past. Durzy said the partnership gives eBay "an opportunity to learn more about the classifieds model."
Craigslist and eBay, both founded in 1995, have taken similar paths to success by serving as online marketplaces for people to buy and sell goods.
EBay built itself into a multibillion-dollar company by popularizing the use of auctions to sell goods. Craigslist, which started as an Internet mailing list for San Francisco events, offers a broader of array of listings, everything from personals, housing and job ads to listings for garage sales and professional services such as plumbers or attorneys.
With founder Newmark as its public face, the quirky company has built up a loyal following around its spartan, easy-to-use Web site, its dedication to community involvement and a refusal to support itself with any form of advertising.
All of the company's revenue comes from job listings, which cost $25 to $75 a month.
The company's mission statement talks about "restoring the human voice to the Internet, in a humane, non-commercial environment," "providing an alternative to impersonal, big-media sites" and "giving a voice to the disenfranchised."
With just 14 employees, craigslist has expanded to 45 cities in three countries, the United States, Canada and the United Kingdom.
In July, the site logged 1 billion page views from 5 million individual visitors. Because it is a private company, craigslist does not disclose financial results. But Buckmaster said the company has been profitable since 1999, a year after it began charging for job listings.
Craigslist had never taken on investors, preferring to stay independent. And it has rebuffed repeated buy-out offers. But Buckmaster said he and Newmark found a lot to like about eBay.
"We're both about connecting people with each other," he said.
Newmark said he was hoping to tap eBay's expertise in combating scam artists who prey on craigslist users.
The deal with eBay evolved out of a minority ownership that Newmark had given to a business partner years ago. The person, whom Newmark declined to identify, left the company some time ago.
Negotiations with eBay began a few months ago, when the minority owner approached the auction house about buying the stake. EBay then approached craigslist executives to get their view on a possible partnership.
"They would have had zero interest in becoming involved unless we were comfortable with them," said Buckmaster. "EBay was nice enough to leave it to us. We talked with people for months to make sure it was the right thing to do in our minds."
Buckmaster acknowledged that craigslist users may be initially confused and angry about the partnership.
"But we look at it as 80 percent of our users know us so well, and they are confident our mission hasn't changed in the last nine years and it won't change now," he said. "We're trying to reassure them that nothing has changed."
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To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com.
(c) 2004, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].
EBAY,
San Jose Mercury News 08/14/2004
Aug. 14--Craigslist, the San Francisco Web site that has endeared itself to users with its free, eclectic classified ads, has struck an unexpected partnership with one of the most profitable e-commerce operations in the world: eBay.
Craigslist said Friday that the San Jose online auction giant has acquired a 25 percent stake in the company from a former business partner of founder Craig Newmark. Terms of the deal were not disclosed, but craigslist said it received none of the sale proceeds.
Craigslist and eBay will share resources and expertise, but they will not merge their operations or otherwise immediately change how their respective Web sites function.
"This is not a sale of craigslist to eBay," said craigslist Chief Executive Jim Buckmaster. "This is about a shareholder changing hands. And we're quite pleased it ended up being eBay, to put it mildly."
The news stunned some craigslist users, who characterized the deal as a clash of cultures and accused Newmark of selling out.
"This is a gigantic mistake," Gary Allen wrote in a user forum that craigslist set up to discuss the deal. "It's impressive that even to this day an average citizen can write to Craig and get a personal reply. Unfortunately, that same personal and human touch is sorely missed at eBay. This is a mistake. eBay bad and robotic, Craig's List human and good."
Craigslist executives said the deal is nothing close to selling out. EBay owns just a minority stake in the company. And craigslist has no immediate plans to change how it operates.
"They don't have an interest in trying to change our mission," Buckmaster said of eBay officials. "They like us the way we are."
An eBay spokesman agreed. "There are no plans we're talking about for specific changes," said Hani Durzy. "We are a minority shareholder, so they will continue to run their business as they see fit."
EBay Chief Executive Meg Whitman has spoken with admiration of craigslist in the past. Durzy said the partnership gives eBay "an opportunity to learn more about the classifieds model."
Craigslist and eBay, both founded in 1995, have taken similar paths to success by serving as online marketplaces for people to buy and sell goods.
EBay built itself into a multibillion-dollar company by popularizing the use of auctions to sell goods. Craigslist, which started as an Internet mailing list for San Francisco events, offers a broader of array of listings, everything from personals, housing and job ads to listings for garage sales and professional services such as plumbers or attorneys.
With founder Newmark as its public face, the quirky company has built up a loyal following around its spartan, easy-to-use Web site, its dedication to community involvement and a refusal to support itself with any form of advertising.
All of the company's revenue comes from job listings, which cost $25 to $75 a month.
The company's mission statement talks about "restoring the human voice to the Internet, in a humane, non-commercial environment," "providing an alternative to impersonal, big-media sites" and "giving a voice to the disenfranchised."
With just 14 employees, craigslist has expanded to 45 cities in three countries, the United States, Canada and the United Kingdom.
In July, the site logged 1 billion page views from 5 million individual visitors. Because it is a private company, craigslist does not disclose financial results. But Buckmaster said the company has been profitable since 1999, a year after it began charging for job listings.
Craigslist had never taken on investors, preferring to stay independent. And it has rebuffed repeated buy-out offers. But Buckmaster said he and Newmark found a lot to like about eBay.
"We're both about connecting people with each other," he said.
Newmark said he was hoping to tap eBay's expertise in combating scam artists who prey on craigslist users.
The deal with eBay evolved out of a minority ownership that Newmark had given to a business partner years ago. The person, whom Newmark declined to identify, left the company some time ago.
Negotiations with eBay began a few months ago, when the minority owner approached the auction house about buying the stake. EBay then approached craigslist executives to get their view on a possible partnership.
"They would have had zero interest in becoming involved unless we were comfortable with them," said Buckmaster. "EBay was nice enough to leave it to us. We talked with people for months to make sure it was the right thing to do in our minds."
Buckmaster acknowledged that craigslist users may be initially confused and angry about the partnership.
"But we look at it as 80 percent of our users know us so well, and they are confident our mission hasn't changed in the last nine years and it won't change now," he said. "We're trying to reassure them that nothing has changed."
-----
To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com.
(c) 2004, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].
EBAY,
