This is pretty huge, at least for those who buy the myth of angelic Craigslist: eBay has effectively confirmed that cyber cherub Craig Newmark screwed over an early employee to enrich himself, then tried to cover it up.

Law-enforcement officials have been slamming Craigslist's prostitute ads for years. CEO Jim Buckmaster's response has been benign: We don't profit from the ads, we're very nice and friendly with the cops, etc. No more. Push Buckmaster too hard, and he will cut you, as South Carolina just learned.

Everyone's favorite blowjobs-for-hire site has pledged to appease 40 state attorneys general by "curbing prostitution ads." You can read Melissa Gira Grant's in-progress response, but the kicker is CEO Jim Buckmaster's promise to start charging $10 a pop or so for Erotic Services ads. It's not pimping, it's protection — haha! I knew I couldn't say that with a straight face.

Tim White, the operator of Craigslistblog.org, an unofficial blog about the free classifieds site, is throwing in the slightly soiled towel. Craigslist, which launched its official blog well after White launched his in March, threatened him with legal action over its name in April. Craigslist's lawyers and White have been going back and forth since then. White tells Valleywag Craigslist has now offered him a settlement: If he agreed not to sell the domain name or run advertising, they'd let him keep the site. Instead of agreeing to it, he's shutting down the site."That particular blog was never about the money, but it definitely makes things more difficult if I have no chance of paying the writers," says White. "I’m torn because there’s so much news every day about them and I’d like to see someone cover it closely." We'll do what we can, Tim. The site's disappearance is disappointing. But the whole episode served to reveal Craigslist CEO Jim Buckmaster as a control-freaky jerk who's sensitive to criticism, and not averse to litigation when he doesn't get his way. That's good information for people to have — and we wouldn't have learned it without White.

We need more gushy "Internet rich dudes, they're just like us!" star profiles, don't we? The problem is, in the Valley, too few are willing to flaunt their success. Take this piece of fiction about Jim Buckmaster, Craigslist's CEO, in the Times of London: "He lives in a modest, rented apartment not far from the company’s global headquarters, a rickety 19th century house tucked between a pizza restaurant and a junk shop in San Francisco." If a "modest apartment" is a freestanding house — a rarity in San Francisco — which can accommodate 40 people for Thanksgiving, then sure. The article also repeats an old canard about how Newmark doesn't have a place to park his car — when he's had parking behind the house he owns for years.The humility of billionaires! No, the real "nerd values" on display are the ones responsible for this wealth. Like the $16 million Buckmaster and founder Craig Newmark got in brokering a deal to let eBay buy a 28 percent stake in their company. Yet they still make a point of posing as heroes of the ultraliberal working class, second-hand Prius and all. Worse yet, people continue to buy it. And not just gullible reporters parachuting in from London, either. Larry from Minneapolis writes in a comment:

After last week's FBI sting conducted in concert with local law enforcement, in which 389 arrests netted 21 underage prostitutes, including four in Sacramento, Craigslist is again in the sex-panicked spotlight. In a familiar routine, law enforcement give stories of how they use the site's Erotic Services section to launch investigations, and CEO Jim Buckmaster gives good onscreen time in voicing the Craigslist company line that it is aiding in efforts to monitor teen prostitution:

Hookers and eBay, shares and cops. If Craig Newmark and Jim Buckmaster, had an attorney on staff with them, would that have prevented questionable legal moves by the founder and CEO of the world's most reliable housemates and hookups platform?

While former Yahoo database engineer Jeremy Zawodny might prefer FriendFeed to Twitter, he'll be commuting to the offices of Craigslist from his home in San Jose. He was recruited via email by CTO Eric Scheide while still at Yahoo, and met with founder Craig Newmark and CEO Jim Buckmaster before leaving Sunnyvale for the Inner Sunset. He'll help maintain and expand the company's ever-growing MySQL database. Because the last thing someone trying to sell a baby needs is for a PHP mysql_fetch_array() call to fail when posting their ad. (Photo by David Weekly)

It looked like an unassuming boast-post on the official Craigslist blog touting the site's fast page load times as computed by Alexa. But it's the post's category tags that caught my eye — Harassment and Philanthropy. Could be nothing, could be a subtle backhand to critics. You decide.

Jim Buckmaster, the suspiciously tall CEO of Craigslist, hates meetings. "I've always found them to be at best unproductive and boring, and at worst toxic and destructive," he tells FT Deutschland. "The people who want to show off do, the brown-nosers brown nose, everyone else wastes their time. I also think the larger the meeting, the worse it is." Buckmaster prefers to email or IM, even while in the same room as his electronic correspondents. When forced to attend a meeting, he finds ways to kill time: "Meetings are excellent for doodling. I can remember doing some really, really spectacular doodles." Doesn't this explain so much about how eBay's relationship with Craigslist soured?

Craigslist has filed suit against eBay in San Francisco County Superior Court, alleging trademark infringement, breach of fiduciary duty, anti-competitve trade practices and deceptive advertising. Why California? Because the state has some of the strictest antitrust and competition trade laws in the country. Craigslist is asking the court to award damages and force eBay to divest from the online classifieds site. Also alleged? That eBay was a big meanie. The best parts:

Jim Buckmaster has just set himself up for a messy court fight. Responding to eBay's lawsuit against Craigslist and its board — the board being Buckmaster and founder Craig Newmark — he has claimed that he and Newmark issued additional shares in the company to themselves "for the sake of protecting the long term well-being of the Craigslist community." Let's leave aside the question of how the community benefits from Buckmaster and Newmark increasing their ownership. Craigslist is registered as a for-profit company; as such, its only legal responsibility is to its shareholders, not its users.

eBay's lawsuit against Craigslist, alleging that founder Craig Newmark and CEO Jim Buckmaster conspired to squeeze eBay out of the company, is fascinating for many reasons. It reveals Buckmaster and Newmark's naked greed: They issued shares of the company to themselves to increase their stakes and decrease eBay's.But it also shows how tight the two have been with Craigslist's workers. eBay owns, or owned 28.4 percent of the company, a stake acquired from early Craigslist employee Philip Knowlton. Knowlton sold his shares in part because Buckmaster and Newmark were trying to squeeze him out, too. (Are you beginning to see a pattern?) The two, acting as Craigslist's board of directors, issued themselves one new share for every five they already owned, a move which pushed eBay's ownership stake down to 24.85 percent — a level which, among other things, eliminated eBay's ability to elect a director for the company. Do the math, and it becomes clear that Craigslist's other shareholders — presumably its employees — own about 3.3 percent of the company. That's a miserably small portion of equity to give employees of a tech startup; normally, about 20 percent of a company's equity is reserved for employees.

The text of eBay's complaint filed in a Delaware court [PDF] has made its way online, and in it, eBay "seeks equitable and legal relief" from Craigslist CEO Jim Buckmaster and founder Craig Newmark for:

At last, some straight talk from Craigslist CEO Jim Buckmaster on his site's role in the "erotic services" business:

Craigslist CEO Jim Buckmaster fired back at eBay on the official Craigslist blog last night, asserting that the auction giant, the owner of a large stake in Craigslist, didn't bother to contact anyone at the company before filing suit. eBay's action, wrote Buckmaster, "hints at ulterior motives." Dozens of commenters left notes in support of the online classifieds site. My favorite is from one Genevieve McGill:

Expect a rash of headlines accusing auction giant eBay of bullying saintly Craig Newmark. eBay has sued Newmark, his business partner Jim Buckmaster, and Craigslist. The charge? Craigslist has allegedly diluted eBay's 28.4 percent stake in the company, which the auction giant acquired from a former Craigslist employee. The part of the story Newmark and Buckmaster don't want anyone to hear: The pair made about $16 million in the process of letting eBay buy the stake in their company. The deal included a shareholder-rights agreement which ought to prevent Craigslist from diluting eBay's stake in the company, people familiar with the deal have told Valleywag. By squeezing out eBay, Newmark and Buckmaster appear to be having their cake and eating it too. Relations between the companies had already deteriorated: eBay had a seat on the Craigslist board, at one point occupied by founder Pierre Omidyar, until last year.

We've heard of in-house PR, but this is ridiculous. Susan MacTavish Best, who is both the girlfriend of Craigslist CEO Jim Buckmaster and his company's PR rep, is also a director of Glasshouse, a nonprofit which produces events meant to educate entrepreneurs. Educating entrepreneurs at an event tonight: Buckmaster. The fireside chat is meant to highlight U.K. Web entrepreneurs. Buckmaster's only plausible U.K. tie? His girlfriend, MacTavish Best, is British. All very cozy, and absurd. What we think really happened here: MacTavish Best couldn't come up with any other speakers, and Buckmaster filled in.

"There was no need for me to act like a jerk." — Craigslist CEO Jim Buckmaster, finally admitting what everyone else had long thought about him, in defending his efforts to shut down a blog critical of Craigslist [Craigslist Blog (the official one)]