EBay and Craigslist square off in US court

EBay has put its former chief executive, Meg Whitman, on the witness stand on Monday to make the case that Craigslist unfairly denied the Internet giant a seat on its board.

Whitman, who said she was "currently running for the governor of California," was expected to spend several hours detailing the negotiations that led to eBay's investment in Craigslist and eventual falling out with the classified ad company's top executives.

The founders of Craigslist and eBay, Craig Newmark and Pierre Omidyar, will also be called to give their accounts.

EBay wants to shed light on the "coercive plan" that it has said Newmark hatched with Craigslist Chief Executive Jim Buckmaster to dilute eBay's ownership stake, ultimately stripping eBay of its seat on Craigslist board.

Craigslist has hit back that eBay used its board seat to glean information to launch its own classified site, Kijiji.

Craigslist also claims that eBay used deceptive tactics to direct traffic away from its site.

EBay, one of the high-flyers in the dot-com boom, pioneered online auctions and spurred millions of people around the world to sell and buy on the Web.

Despite generating $8.5 billion (£4.8 billion) of revenue in 2008 and employing thousands of people, the San Jose-based company has been forced to broaden its market to better compete and expand beyond its traditional online auctions.

In contrast, privately held Craigslist, with only a few dozen employees, is now the top US online classifieds site, beloved for its mostly free service to help people find homes, adopt pets or sell junk from their garages.

Craigslist claimed that after eBay's 2004 purchase of shares from one of the classified site's original investors, Whitman maintained Craigslist would become eBay's "play in classifieds."

But Craigslist said eBay never revealed that it was developing its own classified site, Kijiji, which it launched internationally in 2005 and in the United States in 2007.