Craigslist has reached an agreement with over 40 states to prevent prostitutes from posting ads on the site. The erotic services section of Craigslist is a haven for sex workers. Prostitutes freely advertise their services and rates on the site. The only current requirement to post a sex ad is phone verification.

The agreerement will discourage sex ads by requirig sex workers to pay a small posting fee with a verified credit card. The credit cards will help law enforcement track down illegal activity on the website.

It’s only a matter of time before someone finds a way around this. Sex workers may simply post ads in the dating section of Craigslist from now on. Moreover, I suspect that a number of erotic posting will be paid for with stolen credit cards. The sex industry is notorious for breaking rules.

eBay Inc. (NASDAQ:EBAY) wants to keep growing upon their classifieds business.  They started Kijiji and own 25% of Craigslist.  Jacob Aqraou said the company plans to expand more upon the classifieds business by taking over a fair number of classified companies over the next 6 months.  eBay plans to take advantage of a slow-down in economic growth and the credit crunch.  It makes more sense to them to buy-out companies than to build more from scratch.

eBay is especially looking for companies that have a strong market-share in their demographics or geographic location where the online auction company lacks a presence.  “They have learned that classifieds can be a hell of a business,” stated Peter M. Zollman, founding principal at Classified Intelligence LLC.   Classified Intelligence estimates the offline and online classifieds market at $100 billion.

eBay’s involvement with classifieds right now generate somewhere between $385 million to $770 million out of eBay’s $7.7 billion.  Aqraou specifically said eBay is targeting Eastern Europe and Scandinavia for acquisitions.  eBay is looking for classifieds ads that in specific lines of work such as car deals or real estate agents.

While eBay is planning to acquire classifieds companies, they are battling Craigslist in court.  eBay sued Craigslist for attempting to diluting their shares in the company.  Craigslist sued them back for starting their own competitive classifieds company.

The Chicago Police Department has a new name for classifieds website named after founder, Craig Newmark.  Craigslist is a “A Free Advertising Network For Prostitutes & Pimps” according to Chicago Sheriff Tom Dart.

A couple of days ago, the sheriff’s police in Cook County Chicago arrested 76 individuals involved with prostitutiou through Craigslist.org.  The undercover officers posed as interested customers of the prositutes.  Once the money offer was made, police went in for the arrest.

This is the fourth time that the Cook County sheriff’s police went in for arrests through Craigslist.  Since January 2007, over 149 charges have been made from the Craigslist sting operation.  Sheriff Dart asked Craigslist to remove the “erotic services” section on the site, but Craigslist officials refused to do so.

However, last week Craigslist did place a disclaimer in the erotic services section that human trafficking and child exploitation would be reported.

Craigslist was founded by Craig Newmark.

Information Source:
[1] Valleywag: To end online prostitution, Chicago cops call for Craigslist boycott by Melissa Gira Grant

What makes the whole eBay vs. Craigslist saga interesting is that it seems better to resolve the situation outside of court. Both companies are disagreeing about certain business ethics. Craigslist diluted eBay’s share in the classifieds company, but eBay did create a competitor and even dubbed it a “Craigslist killer.”

Craigslist filed a complaint at the Superior Court in San Francisco, Calif. against eBay claiming that federal and antitrust laws were violated.

eBay responded by saying that the allegations are an attempt to take attention away from their own lawsuit.

eBay filed a lawsuit last month against Craigslist saying that founder, Craig Newmark and CEO, Jim Buckmaster engaged in several transactions to intentionally dilute eBay’s share in the classifieds powerhouse. eBay spent $13.5 million for 28% stake in Craigslist in August 2004.

An unfair move by eBay was that they placed a board member on the Craigslist board who sought confidential information. Craigslist information such as traffic statistics and launch dates was requested while eBay was preparing to launch Kijiji, the “Craigslist killer.”

Stay tuned to Pulse 2.0 as the case develops.

Information Source:
[1] Associated Press:  Craigslist countersues eBay, saying it broke antitrust laws by Amanda Fehd

“Since negotiating our investment with Craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions,” stated Mike Jacobson, eBay’s General Counsel. “We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”

One of the worst things that can happen to a company is if the owners do not get along.  eBay owns a portion of Craigslist.  eBay bought 28% of Craigslist in 2004 for $13.5 million.

eBay started a Craigslist competitor called Kijiji, a free classifieds web site.  Craigslist mentioned that this action nullifies eBay’s rights as a shareholder.  In response, Craigslist found a way to dilute eBay’s share in the basic classifieds site.  In the Craigslist blog, eBay claims that eBay is using their power to dominate the classifieds market.  eBay launched Kijiji in 2005.

eBay has an interest to acquire the rest of Craigslist if they offer according to former eBay CEO, Meg Whitman.  A former Craigslist executive sold his or her shares in the company to eBay directly.

Information Source:
[1] Craig Newmark’s blog: Tainted Love
[2] Associated Press: EBay makes public its complaint against Craigslist by Amanda Fehd

“The soapbox is not liable for what the speaker has said,” stated Kurt Opsahl, senior staff attorney of the Electronic Frontier Foundation, a nonprofit organization.

Craigslist was taken to court recently. The lawsuit was regarding whether Craigslist should be held accountable for housing ads that contain discrimination. Craigslist won the case based on a decision at the 7th U.S. Circuit Court of Appeals.

Craigslist is a classifieds web site where 30 million posts are made per month. Craigslist generates revenue by charging certain major cities a dollar amount per post. The Associated Press called this decision, a triumph for web sites that receive user-generated content.

A consortium of lawyers in Chicago, Ill. got together and decided to accuse Craigslist for over 100 ads that prevented potential housing buyers to be customers.  Some of the ads that appeared in the housing ads included: “NO MINORITIES,” “Requirements: Clean Godly Christian Male” and “Only Muslims apply.”

“We’re pleased the Court agreed that online service providers like Craigslist should not be held liable as `publishers’ of content submitted by their users, and view this outcome as a win for the general public’s ability to self-publish content (such as free classified ads) on the Internet,” stated CEO of Craigslist, Jim Buckmaster.

Craigslist was founded by Craig Newmark.

[Information Source: Associated Press via Google]

Craig Newmark, a man of the Web 0.1 world[1], announced that Listpic has been banned because the mash-up technology was consuming too much of Craiglist’s bandwidth.

Listpic made it easy to browse through pictures that were attached in craigslist classified ads.  Some users were upset because they said that they looked at craigslist more because of listpics services.  Newmark also followed up that “one other major issue still under investigation, where we have yet to determine who’s responsible” is another reason why Listpic was banned.

Once upon a time, Photobucket was banned by MySpace, but both companies made up and Photobucket was acquired by the MySpace.  Could Listpic have a similar fate by Craigslist?  Stay tuned.

Listpic was created by Ryan Sit.  The interaction between craigslist and listpic is available at:
http://sfbay.listpic.com/[2]

[Information Source: Download Squad[3]]

[1] Pulse 2.0: Daylife’s Round 1 Funding-Comments
[2] Listpic.com
[3] Download Squad: Craigslist Blocks Listpic

This is definetely one of the more entertaining interviews of a Web 0.1 [read comment] entrepreneur: Craig Newmark of craigslist.org gets interviewed by Jon Stewart.