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SAN FRANCISCO (Reuters) - Web classifieds leader Craigslist sought a divorce, while online auction giant eBay proposed a formal marriage, according to court papers unsealed on Wednesday that detail a testy four-year relationship.

In a lawsuit filed under seal in Delaware Chancery Court last week, eBay Inc alleged that Craigslist held “clandestine” directors' meetings in recent months to dilute eBay's 28.4 percent stake to 24.85 percent, or less than a quarter of the company.

A redacted version of the suit was released on Wednesday.

“We are no longer comfortable having eBay as a shareholder, and wish to explore options for our repurchase, or for otherwise finding a new home for these shares,” Craigslist Chief Executive Jim Buckmaster was quoted in the court papers as telling eBay's then CEO Meg Whitman last summer.

Whitman responded via e-mail last July with an offer to buy out Craigslist.

“We would welcome the opportunity to acquire the remainder of (the company) we do not already own whenever you … feel it would be appropriate,” she wrote to Craigslist CEO Jim Buckmaster.

The lawsuit cited industry commentators as saying Craigslist could be worth several billion dollars. It ranked as the world's third most valuable Web startup in a list released by Silicon Alley Insider earlier this week: Valued at around $5 billion, Craigslist falls behind only Facebook and Wikipedia.

Reached by telephone late on Wednesday, Craigslist founder Craig Newmark said he would not be interested in a sale, even for billions of dollars.

“Well, we have been saying consistently we are not interested in selling,” he said.

Newmark says providing a good community service rather than earning a lot more money than a single individual needs is his motivation in continuing his Craigslist work. He declined to speak in detail about the lawsuit.

Craigslist operates with only a few dozen employees. Its headquarters is located in a modest, century-old Victorian house in a residential neighborhood of San Francisco. It relies on volunteers to run sites in 567 cities worldwide.

Newmark and Buckmaster have defied the conventional path taken by virtually all successful Silicon Valley start-ups by refusing to go on the stock market through an initial public offering.

At a 2006 UBS media conference, Buckmaster bewildered Wall Street investors by saying Craigslist had no desire to maximize sales by running simple text advertising on its site.

“Sadly, we have an uncomfortably conflicted shareholder in our midst, one that is obsessed with dominating online classifieds for the purpose of maximizing its own profits,” Craiglist said in a statement on its website on Wednesday.

Both companies grew out of the ferment of new Web business ideas that exploded in Silicon Valley in the mid-1990s.

But their stories diverge as eBay went on to dominate online auction markets, becoming a multibillion company. By contrast, Craigslist stayed true to its uncommercial ethic by not charging for most of its local listings.

eBay bought a minority ownership stake in Craigslist nearly four years ago as part of a strategy to buy up classified advertising services both in the United States and Europe.

In 2005, eBay launched its own free online classifieds site called Kijiji, first in several European and Asian markets, and in 2007, it entered the United States. Kijiji operates in hundreds of German cities and has spread to markets including France, Italy, India, Taiwan and Canada.

They compete directly in the United States and a dozen other countries, with Kijiji tailoring its ads to young families in contrast to Craigslist's open flea-market style.

eBay's suit asserts that a move in January by Craigslist to introduce a “poison pill” policy to fend off unwanted takeovers was evidence that Craigslist is trying to drive eBay out.

“Defendants' actions are a thinly disguises stratagem to force eBay to sell its shares to them (or the Company they control) at below market price,” the suit claims.

(Editing by Eric Auchard and Valerie Lee)

NEW YORK (Billboard) - In a move meant to get fans into premium seats and bypass ticket brokers and scalpers, industrial-rock bandNine Inch Nails has reserved tickets to each of its upcoming summer tour dates for registered users of its Web site, NIN.com.

The limited allotment of tickets will be made available through online pre-sales only to users registered under their legal names on NIN.com. Tickets acquired through these pre-sales will be marked with the purchaser's name and will have to be picked up at the appropriate venue on the date of the event. A valid government-issued ID matching the name printed on the ticket will be required for entrance.

The pre-sales will begin about 72 hours before general online ticket sales for each event.

Nine Inch Nails' summer tour kicks off July 25 at the Pemberton Festival in Pemberton, British Columbia, and continues through September 6.

Nine Inch Nails' new fan ticketing procedure follows similar strategies from bands like Pearl Jam and Maroon 5, who have also required fans who purchase tickets from their Web sites to pick up tickets with valid I.D. at the concert only.

Reuters/Billboard

SAN FRANCISCO - Microsoft Corp.’s directors met Wednesday to consider raising the software maker’s $41.9 billion bid for Yahoo Inc. instead of pursuing a hostile takeover attempt, according to a published report.

The board emerged from the meeting without reaching a decision, The Wall Street Journal reported, citing unnamed people familiar with the matter.

The boardroom intrigue heightens the suspense hanging over Microsoft’s bid since Yahoo let pass an April 26 deadline for accepting the offer. Microsoft has indicated it will reveal its response to Yahoo’s latest snub before the end of the week.

Microsoft Chief ExecutiveSteve Ballmer had threatened to oust Yahoo’s 10-member board — including Yahoo co-founder and CEO Jerry Yang — if it didn’t relent and agree to a sale.

But Ballmer apparently is having second thoughts about attempting a coup, which likely would involve several months of animosity and distraction, with no assurance of victory.

Contradicting Ballmer’s recent public statements, Microsoft privately has indicated it might be willing to boost its offer to as much as $33 per share, up from the bid’s initial value of $31 per share, the Journal reported Wednesday.

Microsoft also is weighing withdrawing its bid — a move likely to cause a precipitous drop in Yahoo’s stock, which has been bolstered by the 3-month-old takeover bid.

Yahoo shares gained five cents Wednesday to finish at $27.41. Before Microsoft announced its unsolicited bid in February, Yahoo’s stock price stood at $19.18, near its four-year low.

If Yahoo’s stock deteriorated during the next few months, Microsoft could return with another bid that would be more difficult to turn down.

Microsoft hadn’t responded to requests for comment as of late Wednesday.

Microsoft’s lengthy internal debate over how to proceed illustrates the tremendous stakes underlying a deal that could reshape the Web for millions of consumers and thousands of advertisers.

A Yahoo takeover also would represent by far largest acquisition in Microsoft’s 33-year history.

Yahoo’s board maintains the Sunnyvale-based company is worth substantially more than Microsoft’s initial bid of $44.6 billion, or $31 per share. The value of the cash-and-stock offer had declined to $29.06 per share Wednesday, reflecting a downturn in Microsoft shares since the saga began.

Even a sweetened offer of $33 per share might not be enough to wrap up a friendly deal because some of Yahoo’s major shareholders have signaled they want at least $35 per share, or about $50 billion.

Ballmer and Bear Stearns CEO Alan Schwartz, a Microsoft adviser, have been lobbying Yahoo shareholders to rally support for a lower price, the Journal said.

Most analysts have been predicting for weeks that Microsoft could raise its offer as high as $35 per share. Microsoft, though, has insisted there is little reason to up the ante, given Yahoo’s recent financial malaise and the absence of competing bids.

Microsoft also may be trying to hold down the price because it plans to spend a substantial sum on incentives aimed at retaining Yahoo’s top executives, engineers and other key employees if it the proposed marriage goes through.

The software maker has earmarked about $1.5 billion — the equivalent of nearly $1 per Yahoo share — for retention packages, according to details that emerged in a court hearing held in a shareholder suit filed against Yahoo for rejecting the Microsoft bid.

A transcript of the March hearing quotes a Yahoo lawyer telling a Delaware judge that minutes from a Feb. 8 Yahoo board meeting reveal Microsoft had stated its intention to make the retention payments.

Yahoo’s directors haven’t specified an acceptable sales price, but some analysts believe they may want close to $40 per share — a price that Microsoft indicated it was willing to pay when the two sides held private discussions in early 2007.

But Yahoo’s earnings have sagged since then as the company lost ground to rival Google Inc. as they compete for Internet advertising sales.

Yahoo still holds two trump cards that could thwart a Microsoft takeover.

It has tested a potential advertising partnership with Google that could lead to a long-term alliance if it can win regulatory approval. And it has explored merging with the online operations of Time Warner Inc.’s AOL.

If Microsoft scraps the Yahoo offer, it will intensify the pressure on Ballmer to prove he can come with another plan to mount a more formidable challenge to Google — the main reason Microsoft wanted buy to Yahoo.

Despite years of investment, Microsoft’s online operations are still struggling. The division lost $745 million on $2.4 billion in revenue through the first nine months of the company’s current fiscal year. In contrast, Google made $1.3 billion on $5.2 billion in revenue in just the first three months of this year.

Some analysts think Ballmer would be better off using the money he planned to spend on Yahoo to buy a basket of more nimble Internet startups that have been building loyal audiences and could help drum up more online advertising.

Take note, Microsoft: There may be better ways to diversify your business than by wooing Web 2.0 companies such as Yahoo.

Internet service provider United Online– the owner of NetZero and Juno– plans to get into the flower business. On Wednesday, it said it would pay about US$456 million in stock and cash to acquire FTD Group, the company that provides flowers and related services to about 20,000 retailers in the U.S., Canada, the U.K. and Ireland.

The deal makes sense because the flower market is “experiencing significant growth in the Internet sector,” and United will be able to drive its 50 million existing customers to FTD's Web sites, the two companies said in a joint statement. United's NetZero and Juno online businesses will account for less than 25 percent of all revenue under the deal.

United is thinking of including FTD products in its MyPoints.com customer loyalty service, which the company acquired in 2006. But FTD will continue to operate from its existing headquarters in Downers Grove, Illinois, as a wholly owned subsidiary of United.

The deal is expected to close by the end of September 2008, pending the approval of FTD stockholders. Investment firms holding about 32 percent of FTD shares have agreed to the acquisition.

SugarCRM is bridging the distance between mobile phones and PCs with a new version of its Web-based customer relationship management software now available for beta testing.

In SugarCRM 5.1, the company is coming out with a better interface for mobile devices with standard HTML (hypertext markup language) browsers, said Chris Harrick, vice president of product marketing. It will let users view the same number of standard SugarCRM modules, or sets of information, on their smart phones and PDAs (personal digital assistants) as on their PCs. Supported devices include the Apple iPhone and Research in Motion BlackBerry, two of the platforms in highest demand among SugarCRM's customers, Harrick said.

More enterprise tasks are finding their way to mobile phones as the devices grow in processing power, connection speed and browser sophistication. Research in Motion has wooed third-party developers to bring applications to the popular business and personal device, and iPhone users are eagerly awaiting software to be developed using Apple's recently released iPhone SDK (software development kit). But SugarCRM is using the browsers of those devices and others, just as it uses standard browsers on PCs.

SugarCRM is available in a hosted SaaS (software-as-a-service) version as well as a version that can be hosted in a customer's own data center, but there is never any special software to load on client systems, Harrick said. Last week, BT said it would offer SugarCRM as well as the NetSuite on-demand ERP (enterprise resource planning) product as a hosted service for small and medium-sized businesses, SugarCRM's core market.

SugarCRM lets sales people and executives view and modify information in a series of modules, essentially databases that each contain a certain type of information. Those may include contacts, information on sales leads and histories of customer purchases. Previously, users of SugarCRM on mobile phones were only able to use about five to eight modules, he said. With the new interface, they can use more than 20, the same standard ones available on a PC. In the future, custom modules that enterprises create will be available on their mobile devices, Harrick said.

The Version 5.1 beta release also includes Complex Reporting Sets, the ability to compile reports from data in multiple modules. For example, a single report could provide information about sales leads that responded to a particular advertising campaign and later became customers. Other new features include Run-Time Filters, which let users change the terms of complex reports and get the new results on the fly, and easier integration of SugarCRM data into Microsoft Excel spreadsheets.

SugarCRM offers both a free community edition of its software and a more fully featured version that is sold on a subscription basis. Both are open source. Anyone can participate in the Version 5.1 beta test for free at SugarCRM's Web site. The company expects the new software to emerge from beta at the end of June.

SAN FRANCISCO (Reuters) - International Business Machines Corp (IBM.N) on Wednesday launched tools to reduce computer energy consumption as IBM hopes to boost its business of selling power-saving technologies.

The products, announced at an IBM business-partner conference in Los Angeles, are designed to measure power consumption and reduction across energy-hungry computer data centers that run corporate networks and Web sites.

The world's largest technology services company is offering software that tracks and caps data-center energy consumption, including power for air conditioning to cool server computers.

IBM is also extending to 27 more countries a program begun in seven countries last year that lets companies earn and trade certificates awarded for verified energy savings.

“Energy efficiency has become a critical business metric, like product reliability and customer satisfaction,” William Zeitler, head of IBM's systems and technology group, said in an interview with Reuters.

IBM is expanding in so-called green data centers as it looks for new growth areas in developed regions such as Western Europe as well as in developing countries that are spending heavily on new technology infrastructure.

“The opportunity for us is to go to clients — there are an enormous number who are either transforming their data centers or will have to transform them,” Zeitler said. “This is a critically important problem in the industry.”

IBM's green data center initiative has already begun to pay off a year after it was launched. It generated nearly $200 million of technology-services contract signings in the first quarter and about $300 million in the fourth, Chief Financial Officer Mark Loughridge said in recent earnings presentations.

Many of the countries added to the certificate program are in emerging markets in Asia and the Middle East, where Armonk, New York-based IBM has been generating double-digit percentage revenue growth from building technology infrastructure in telecoms, transportation and energy, among other areas.

Growth is also strong in North America and Western Europe, where banks, for example, are trying to rein in energy costs from running massive volumes of financial transactions on their computers. Banks are among IBM's biggest customers.

“It's really taken off in North America in particular and Western Europe,” said Joe Clabby, president and industry research analyst at Clabby Analytics. “Countries that are not energy self-sufficient are jumping on this initiative.”

(Editing by Braden Reddall)

San Francisco - Tibco Software is set to make a play in the computer hardware space, readying its Tibco Messaging Appliance for ultra-low-latency messaging deployments.

The device was featured at the Tibco User Conference (TUCON) in San Francisco on Wednesday. Due in September, the appliance will be used for applications such as algorithmic trading and serve as an addition to the Tibco Rendezvous messaging product family. It will accelerate the capabilities of Rendezvous software and work with existing Tibco Rendezvous messaging application installations.

“This is the first Tibco appliance,” said Matt Quinn, Tibco senior vice president of engineering and technologies. The company is expanding into hardware to accommodate what was described as explosion in event-processing.

Details were not offered on than the internals of the appliance, such as what type of processor it uses. The product will cut datacenter power utilization and optimize space utilization, Tibco said.

While a press statement on the appliance called it Tibco Messaging Appliance, a slide of the appliance shown at the conference bore the nameplate, P-7500. Solace Systems is manufacturing the appliance.

Quinn stressed Tibco's emphasis on event-driven computing and the company's Chairman and CEO, Vivek Ranadive, also emphasized event processing during an earlier keynote presentation.

IT, Ranadive said, has moved from the mainframe-dominated?? Enterprise 1.0 stage in the 1960s to Enterprise 2.0 in the late-1970s and 1980s, marked by databases. Now, it is in its Enterprise 3.0 phase, which is an event-driven era.

“We have to be able to tie 100 million events to a terabyte of information, and we have to do that in sub-second response times, said Ranadive.

Tibco used the conference to roll out several new products and strategies, including its planned use of Microsoft Silverlight browser plug-in technology as an avenue for developing rich interfaces for Tibco products. Silverlight will complement Tibco's General Interface technology.

Also announced was availability of SpotFire enterprise analytics software, featuring mashup capabilities. Integration with existing mashups also is featured. Tibco's Spotfire operational analytics system also was announced, featuring a closed-loop system for analysis and making continual business improvements.

Tibco introducd ActiveSpaces, for handling large volumes of data in memory with very fast access time. “Distibuted cache is a complex problem,” and Tibco wants to make this technology easy to use, Quinn said.

The company's Business Events version 3 system, meanwhile, is in final phases of testing. It will provide distributed and clustered rules, complex event processing and a streaming engine.

The Tibco iProcess BPM system version 11 was unveiled, offering real-time worklist management, an updated installation and capabilities for LDAP. Accompanying iProcess 11 is Business Studio version 3, featuring Eclipse backing and enablement of process as services. Business Studio has provided business process management capabilities such as modeling.

Tibco announced Managed Transfer, for complex file transfer. ActiveMatrix Service Performance Management, for predictive performance, also was announced.

Enterprise Message Service Version 5 was rolled out, offering new support for server to client-side multicasts and improvements in database support, security and plug-in capabilities.

Ranadive aired his vision of how the future will be about predictive business and correlating events. He also cited event-driven SOA.

A Tibco user speaking at the conference, Anthony Abbatista, vice president of technology solutions at Allstate, cited progress the company has made in revamping its own internal IT practices. Five years ago, the company had a lot of different varieties of software, few common frameworks and adherence to numerous and sometimes-conflicting standards. Reuse was limited, and Allstate had many shallow relationships with many vendors. Point-to-point integration was common.

Now Allstate uses Java and .Net frameworks as a basis for increased reuse and speed and uses data hubs. “We have petabytes of data now,” with data volumes growing 30 percent to 40 percent annually, Abbatista said.

Allstate also adheres to consistent industry standards, now has just a handful of strategic partners and has accomplished a lot without increasing its technology budget, he said.

SAN FRANCISCO - EBay says Craigslist believed eBay broke an agreement not to engage in competitive activity and thereby lost rights granted to it as a shareholder.

In a complaint eBay released Wednesday, the online auctioneer reveals details about the lawsuit it filed last week, claiming that Craigslist unfairly tried to dilute eBay’s stake in it.

Parts of the complaint, mostly those that refer to stock holdings, are still blocked out at Craigslist request, eBay said.

EBay purchased a 28 percent stake in privately held Craigslist in 2004 from an unnamed former Craigslist executive who solicited buyers for his stake.

SAN FRANCISCO - Microsoft Corp.’s directors are meeting Wednesday to consider raising the software maker’s $41.9 billion bid for Yahoo Inc. instead of pursuing a threatened hostile takeover attempt, according to a published report.

A decision could emerge after the meeting, The Wall Street Journal reported, citing unnamed people familiar with the matter.

Microsoft also is weighing withdrawing its bid — a move likely to cause a precipitous drop in Yahoo’s stock, which has been bolstered by the 3-month-old takeover bid.

If Yahoo’s stock deteriorated during the next few months, Microsoft could return with another bid that would be more difficult to turn down.

Investors have been eagerly awaiting word of Microsoft’s next move since Yahoo let pass an April 26 deadline for accepting the offer.

Microsoft Chief ExecutiveSteve Ballmer had threatened to oust Yahoo’s 10-member board — including Yahoo CEO Jerry Yang — if it didn’t relent and agree to a sale.

Yahoo’s board maintains the Sunnyvale-based company is worth substantially more than Microsoft’s initial bid of $44.6 billion, or $31 per share. The value of cash-and-stock offer had declined to $29.06 per share Wednesday, reflecting a downturn in Microsoft shares since the saga began.

Contradicting Ballmer’s recent public statements, Microsoft privately has indicated it might be willing to boost its offer to $32 or $33 per share, the Journal reported Wednesday.

That price still might not be enough to wrap up a friendly deal because some of Yahoo’s major shareholders have signaled they want at least $35 per share, or about $50 billion.

Ballmer and Bear Stearns CEO Alan Schwartz, a Microsoft adviser, have been lobbying Yahoo shareholders to rally support for a lower price, the Journal said.

Ballmer is vacillating between a higher offer and withdrawing the bid, and his recommendation is likely to sway Microsoft’s board, the Journal reported.

Yahoo’s directors haven’t specified an acceptable sales price, but some analysts believe they may want close to $40 per share — a price that Microsoft indicated it was willing to pay when the two sides held private discussions in early 2007.

But Yahoo’s earnings have sagged since then as the company lost ground to rival Google Inc. as they compete for Internet advertising sales.

Yahoo still holds two trump cards that could thwart a Microsoft takeover.

It has tested a potential advertising partnership with Google that could lead to a long-term alliance if it can win regulatory approval. And it has explored merging with the online operations of Time Warner Inc.’s AOL.

SAN FRANCISCO - Even criminal hackers want to protect their intellectual property, and they’ve come up with a method akin to copyrighting — with an appropriate dash of Internet thuggery thrown in.

Professional virus writers are now selling a suite of software on the Internet with an unusual attachment: a detailed licensing agreement that promises penalties for redistributing the malicious code without permission.

“I just kind of chuckled — it’s kind of humorous,” said Zulfikar Ramzan, senior principal security researcher with Symantec Corp.

Symantec researchers noticed a Russian-language example floating around the Internet and wrote about it on the company’s official blog this week. They said it’s the only example they’ve seen.

The software is used to infect computers and control them remotely. The zombie machines can be used to pump out spam, launch more attacks or steal personal information from their owners.

Networks of zombie machines — known as “bot nets” — can be extremely lucrative, sometimes bringing millions of dollars in profit for their authors and their distributors. To maximize that profit, the software analyzed by Symantec’s researchers contained the following rules:

_The customer can’t resell the product, examine its underlying coding, use it to control other bot nets or submit it to antivirus companies and agrees to pay the seller a fee for product updates.

_The threat: Violate the terms, and we’ll report you ourselves to the antivirus companies by giving them information about how to dismantle your bot network or prevent it from growing bigger.

While not legally binding, the terms amount to a novel way to protect ill-gotten profits — except that by ratting out their customers, malware authors risk drawing attention to their own enterprises and giving antivirus makers clues on combatting them.

“We know they can’t actually enforce it, and they probably wouldn’t try,” Ramzan said. “What’s funny is they put more effort into their EULA (end-user license agreement) than traditional software companies might.”

The ultimate rub? Apparently the threat was not only hollow but unheeded. Symantec said the program that’s accompanied by the novel rules is being traded freely online — and so far its authors haven’t called Symantec to make good on their threat.