updated - August 14, 2020 Friday EDT
Online marketplace Ebay Inc. sold its 28.4% stake in Craigslist back to the internet classified site and ended the litigation between the two.
The price of the deal has yet to be disclosed, but eBay said in a statement that the legal cases between the two will be dismissed.
Analysts saw the move as part of eBay's efforts to declutter its operations as it focuses on strengthening its core businesses. The deal with Craiglist comes ahead of eBay's plan to spin off its PayPal unit and sell its eBay Enterprise division, which provides warehousing, customer support and delivery services for online merchants.
In selling back its stake to Craigslist, eBay lets go of a company it had occasionally clashed with but has not meet the online marketplace's expectations as the internet classified site has been left behind by its rivals and has been slow to adapt to the opportunities provided by smartphones.
EBay purchased a stake for $34 million in Craigslits in 2004 when it was still among the hottest e-commerce brands. Soon after eBay launched a similar classified internet site called Kijiji that has since been renamed eBay Classifieds.
The Wall Street Journal reported that in 2008, eBay took Craigslist to court for allegedly diluting its stake in the company that reduced its board seat. Craiglist, meanwhile, accused eBay of using its board seat to learn confidential information about its business that allowed it to launch a competing site called eBay Classifieds.
Craigslist's revenues now come mainly from listings of job openings, apartments available for rent and automobile for sales, but used to entertain advertisements for adult services. The Wall Street Journal report said Craigslist sales were estimated at $335 million, double the year before, by classified advertising consultancy AIM Group.
Craigslist was founded by Craig Newmark in 1995, providing a list of events San Francisco via email. It is currently ranked eighth by Alexa.com in terms of internet traffic in the U.S. according to a story on the Bench Mark Reporter.
TOP 10 FRANCHISES OF 2020