"A Betrayal of Trust" Soured Craig on Meg

Craigslist cofounder says then-eBay CEO broker her word

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    NEWSLETTERS

    Paul Downey
    Craig Newmark wasn't happy with eBay's behavior, but refused to let it show or bring it up with then eBay CEO Meg Whitman.

    "I take people at their word," a "deliberate" Craig Newmark told a Delaware court room in the fifth day of a trial in a lawsuit pitting online auction company eBay against online classifieds company Craigslist.

    Newmark, Craigslist's cofounder, said that then-eBay CEO Meg Whitman made a verbal promise not to acquire Craigslist or try to crush it in competition after eBay purchased a minority stake from a former investor.

    Whitman is currently vying for the Republican nomination in next year's gubernatorial election.

    However, he kept his suspicions of her disingenuity to himself, and in fact never spoke to Whitman after the deal went through, feeling that eBay's subsequent actions amounted to a "betrayal of trust."

    The statement of trust was Newmark's response to question from eBay lawyer Mike Rhodes as to why Craigslist didn't include this promise in the sale contract.

    A $16 million payout -- one that an eBay lawyer labeled "extortion" -- made to Newmark and Craigslist CEO Craig Buckmaster as part of eBay's investment apparently didn't salve those hurt feelings.

    Rhodes also tried to get Newmark to reveal exactly how much Craigslist spend and earns, asking if the company enjoys an 80 percent operating margin -- meaning it keeps nearly 80 cents of every dollar it takes in. Craigslist counsel objected on the grounds that such information was under seal.

    Yesterday it was revealed by eBay's Garrett Price that eBay wanted to get a stake in Craigslist so that Google wouldn't have the chance.

    Craigslist CEO Jim Buckmaster is to take the stand next.

    Photo by Paul Downey.

    Jackson West finds it odd that Craigslist would so trust a company that it seems to have both feared and loathed.