Craigslist is one of my district neighbors, I often see CEO Jim Buckmaster and his partner Susan Best, and of course, founder Craig Newmark. Cragslist is not only a San Francisco institution, it is one of the top ten largest web sites in the world, providing a mostly free classifieds ad service for millions of people in 567 cities.

It's an amazingly useful social service provided by a private company that happened to reluctantly acquire EBay as a minority shareholder in November 2004 when an early shareholder sold his shares to the online auction giant.

Initially Mr Newmark and Mr Buckmaster agreed to the sale because they were impressed by EBay's stated common values. They were also impressed by Ebay's founder and chairman Pierre Omidyar and his widely publicized philanthropic activities and they asked for him to be Ebay's representative on the Craigslist board believing he had " a moral compass similar to its own."

Things started falling apart very quickly as Ebay demanded more control over Craigslist and access to competitive information. The falling out between the two companies is now the subject of of two lawsuits filed against each other. Ebay has complained that Craigslist illegally reduced its minority holding and this week Craigslist complained that Ebay stole proprietary information and engaged in other nefarious activities.

On the Craigslist blog:

We filed a complaint in California today, charging eBay with unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.

The text of Craigslist's complaint makes for fascinating reading and provides an inside peak into a very private company.

Full text of the complaint

Reuters story by Eric Auchard: Craigslist sues eBay, alleges corporate spy plan