Online classified ad site Craigslist is none too happy with having e-commerce giant eBay hold a stake in its business. And eBay isn’t taking kindly to Craigslist’s efforts to diminish that ownership. The extent of both sides’ displeasure was made plain in court papers unsealed in Delaware on Apr. 30.

The documents uncover years of wrangling as Craigslist became increasingly uncomfortable with eBay’s minority ownership and resisted the larger company’s acquisition overtures. The tussle reflects eBay’s determination to maintain at least partial control of a successful, expanding company as growth in its own core business slows and its share value declines.

EBay kicked off the legal battle with an Apr. 22 lawsuit accusing Craigslist of illegally reducing its ownership. According to the lawsuit, Craigslist diluted eBay’s holding, initially at 28.4 percent, to less than 25 percent, thereby negating eBay’s right to elect a director to Craigslist’s board. Founded by Craig Newmark in 1995, Craigslist is worth “several

billion dollars, thereby making eBay’s minority stake highly valuable,” according to the lawsuit.

E-Mails from Meg Whitman

Craigslist is so valuable, in fact, that eBay indicated it would like to buy the portion it didn’t already own. The Delaware Chancery Court released a copy of eBay’s suit that reveals a series of e-mails sent last year within former eBay CEO Meg Whitman and Craigslist CEO Jim Buckmaster. “We would welcome the opportunity to acquire the remainder” of Craigslist whenever its owners “feel it would be appropriate,” Whitman wrote in an e-mail dated July 23, according to the papers.

The desire to buy Craigslist is consistent with eBay’s strategy under Whitman and new CEO John Donahoe, who took by Apr. 1, to move beyond its traditional online auction business into other areas of e-commerce, including payments and Web-based communications. Purchases include online payments pioneer PayPal, Web phone company Skype,…

Orginal post by Top Tech News