EBay Inc. said it had sold its 28.4% equity stake in Craigslist Inc. back to the online classified advertising company.
The deal is the latest step by eBay to focus on its online marketplace as it restructures. The San Jose, Calif.-based company is scheduled to spin off its PayPal transactions business in the third quarter. The company also is trying to sell its eBay Enterprise division, which provides warehousing, delivery and customer support to online merchants.
"This is definitely a presplit house cleaning," said Kerry Rice, an analyst at Needham & Co. "Eliminate peripheral businesses, focus on the core. I do not think Craigslist is important to EBay's future. I think the Internet has passed Craigslist by."
EBay's 2004 purchase of the stake and the subsequent creation of its own online classified site, Kijiji, prompted Craigslist to mount takeover defenses and file lawsuits in California and Delaware. Kijiji was later renamed EbayClassifieds.com.
With the sale, all litigation between the companies will be dismissed, eBay said in a statement today. The value of the stake in Craigslist, which is closely held, wasn't disclosed.
Craigslist said in the California suit that EBay used proprietary information obtained from the San Francisco-based company during negotiations over the stake purchase to start the competing business.
Craigslist was founded in 1995 by Craig Newmark, a former International Business Machines Corp. computer programmer, as an e-mail list of San Francisco events. It is the No. 8 website by traffic in the U.S., just behind eBay, according to Amazon.com Inc.'s Alexa.com, a research service.