Valleywag was the first to report, back in 2007, how Newmark and co-founder Jim Buckmaster required the equivalent of a $16 million bribe from eBay to honor an early employee's 25 percent stake in the online classifieds company. The employee, purported Craigslist co-founder Philip Knowlton, had previously agreed to sell his equity to eBay in desperation, for a separate $16 million, after Newmark and Buckmaster tried to dilute his holdings with new shares. People would speak about the incident only anonymously at the time.

But an eBay executive laid out the same story in testimony today in Delaware court, saying Newmark and Buckmaster demanded $16 million and threatened to block the deal if they didn't get it — their ownership award to Knowlton be damned. Their demand amounted to "essentially extortion," the executive, Garrett Price, testified, according to NBC Bay Area and the San Jose Business Journal.



What's more, Price also testified that Newmark and Buckmaster asked that the payment be hushed up to protect Craigslist's altruistic image. That way, Newmark could continue to float preposterous, image-enhancing deceptions like this one, swallowed by Wired and printed as part of an August 2009 profile of Newmark:

Newmark abandoned the idea of running Craigslist as a nonprofit, which would have required him to learn and follow too many rules.... in the meantime he handed out a significant portion of his ownership to others as a way to avoid acquiring too much authority.

So on the one hand, Newmark is telling the press he's intentionally diluting his ownership in the company to keep his ego in check; on the other, he's frantically bolstering that ownership, a process he only halts when he gets a payoff, made to him, at the expense (effectively) of a major shareholder and former employee/co-founder. What's more, as a result of these shenanigans, his quirky indy SF startup is now partly sold out to a big bad tech giant.

Newmark has yet to take the stand. It should be interesting to see how he spins his way out of this one — not only in the court of law, but in the court of public opinion and brand image.

The only non internet person on Couric's list, in fact, is FCC Chairman Julius Genachowski. The other people who control the media, according to the CBS Evening News anchor, are all Web heads:

• Google's Larry Page and Sergey Brin.
  
• Huffington Post founder Arianna Huffington.
  
• The founders of the women's blogging network BlogHer: Jory Des Jardins, Elisa Camahort Page and Lisa Stone. This is a big stretch but we're assuming Couric is trying to imagine the less sexist world she'd like to live in and lend some buzz to a feminist cause. Fair enough.
  
• Craig Newmark, Craigslist founder.
  
• Twitter co-founders Evan Williams and Biz Stone.
  
• Facebook CEO and co-founder Mark Zuckerberg.

Couric is obviously just trying to butter up people who might be able to help her ditch the old fuddy-duddies at CBS News and expand her promising sideline in lifecasting. Which is, frankly, brilliant. We know some other people who might be able to help you Katie, call us.

Oh, and the Jewish thing? Couric is no anti-Semite, but we couldn't help but notice that her list of people who supposedly control the media does contain a majority of people of Jewish descent: Brin, Page, Newmark, Zuckerberg, Genachowski and Camahort Page.

Of course, the pace of change in Silicon Valley has a way of leveling these old-world distinctions. Page's family was non-practicing; Zuckerberg has gone atheist and Camahort Page is "a total non-religious person."

[via Bay Newser via NBC Bay Area]

Web advertising maven John Batelle will tell you all about his $4,000 summit on "how the Web is putting the world to work," just as soon as he figures out how to get his website to... to, uh, work. Ahem.

The Wall Street Journal's Julia Angwin stopped into Barnes & Noble and did an ego check on her well written-book about a fast-cooling social network. Please no one show her Ben Mezrich's book display.

Sometime Gawker Media hand Kourosh Karimkhany officially has a point.

Would-be celeb-Web mogul Bonnie Fuller is "worried" about Angelina Jolie's health, if by "worried" you mean "publicly heckling and mocking."

Craigslist customer service rep/founder Craig Newmark had a sad. Go easy on him tomorrow, aggrieved pervy customers!

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

Wonderwall editor Alex Blagg can't bring himself to just put the DVD in the mail, already. You can get it back, Alex! It's like the library. Or at least that's what we tell ourselves.

Online videographer Molly McAleer is feeling child abusey again!

The Onion's Joe Randazzo officially wins the heated Twitter competition to crack the funniest joke about the death of Dominick Dunne.

Wired portrayed Craig Newmark as a stubborn oddball, so the Craigslist founder took that image and ran with it. Well played.

Susan Orlean passed along the Good News about the resurrection of the late Julia Child.

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

To determine why teens might not like Twitter, the Chicago Tribune's Amanda Maurer decided she'd seek out teens... on Twitter.

Craig Newmark of Craigslist would like to lose weight while playing with his iPhone. It's important to have dreams.

Twitter's Evan Williams tried out some "pretty rad" software for making bodacious tweets. The program in question is in closed beta. Bummer.

Cody Brown of NYU Local sees critiques of the newspaper industry hidden absolutely everywhere.

echo 'Point taken, Hooker!'

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

Is Craigslist's new "adult" category just a name change? "We're very encouraged that Craigslist is doing the right thing in eliminating its online red light district with prostitution and pornography in plain sight," said Connecticut attorney general Dick Blumenthal. "We'll be watching and investigating critically to make sure this measure is more than just a name change." Craigslist will cancel all existing Erotic Services ads in seven days, and start up the new category. In other words, it's just a name change.

There is one critical difference: Craigslist employees will be reviewing ads for tell-tale prostitution-friendly phrases. (For example, if your escort asks for a "donation" of "roses," she's actually talking dollars, and it's not optional.) Of course, this just means that the sex workers will go to other, less-monitored areas. Craigslist Missed Connections will never be the same! Or they'll go to other websites altogether.

The only highlight in this silliness: The image of hypernerdy Craigslist founder Craig Newmark, who constantly reminds everyone that his only role at the site is as a customer-service rep, manually reviewing sex ads. We reached Newmark on the phone. As we started to ask him how his customer-service department would handle the new workload, he reminded us there were other Craigslist customer-service personnel, and then referred calls to Craigslist CEO Jim Buckmaster and PR rep Susan MacTavish Best. Come on, Craig: At the very least, this new assignment should give you something to talk about at parties besides how terrible newspapers are.

The petitioners are echoing media pressure in calling for Craigslist to shut down its Erotic Services section, thereby preventing the likes of Markoff from contacting 25-year-old "masseuses" through the site. Craigslist does charge for erotic listings, but donates the revenues from the category; Casual Encounters is free. The only way the site makes money is from job and apartment listings; Craigslist doesn't make a dime when you unload your old couch on the site. Frankly, Craig Newmark would make more money and have fewer headaches if everyone not looking for a job or a place to live went elsewhere.

And of course, if Craigslist banned Erotic Services, that's exactly what its clientele would do — buy and sell the same services elsewhere online. That's a far easier route to take, and would save Craigslist a lot of headaches complying with vice-squad subpoenas — which is why most websites ban the sex trade altogether.

"Craigslist is the largest source of prostitution in America," Cook County sheriff Tom Dart told ABC News. Nonsense. Horny, desperate men are the largest source of prostitution in America. And Dart should be happy that they're visiting a website which rolls over so easily when the police call.

What no one is saying: Laws banning prostitution, which makes women engaged in trading sex for money vulnerable to predators, are the real problem. Western Europe's boring brothels suggest that legalizing prostitution is a danger to sexual excitement but not public mores. Sure, boycott Craigslist! It's an easy move to stop spending money with a site that costs nothing — one that changes exactly nothing about the dynamic that got Julissa Brisman killed. Meanwhile, Newmark, the lazy millionaire, will keep doing his humble-nerd act all the way to the bank.

Olson's family is holding a service for her on May 3 at which Newmark is due to speak. The plans for a memorial come after a jury found Michael Anderson guilty of premeditated murder in the October 2007 killing. (He's the first man to have gotten the label "Craigslist killer"; more recently, Boston medical student Philip Markoff has been accused of using a Craigslist ad to lure a masseuse to her death.)

Newmark told the Minneapolis Star-Tribune that the Olson case was "the worst that I can recall." The Olson family says Newmark has been supportive of them.

It all seems ridiculous. If Anderson had placed a classified ad in City Pages, would we be calling him the alt-weekly killer? Would its publisher be invited to speak at her funeral? Anderson's just a killer. And Newmark's just an amoral millionaire with an insanely lucrative website which he can't be bothered to police for psychopaths. Does tacking "Craigslist" on either man's label change anything?

The editorial workers would invest some of their own money, a Guild representative told the Appeal. But they could hardly acquire the Chronicle on their own, even assuming a heavy markdown from Hearst's 2000 price of $660 million.

Possible buyers fall into a few broad categories:

Old San Francisco money: There's been chatter among Chronicle journalists for years about the possibility of a local investor like private-equity billionaire Warren Hellman or Gap founder Don Fisher buying the paper. It's hard to imagine either of those red-blooded capitalists giving up on the idea of a profitable local newspaper, but then one never puts money into a cash-hemorrhaging hometown paper for purely rational reasons.

New dot-com money: If it's hard to imagine local elders funding a (purposely!) non-profit Chronicle, it's even harder to picture Silicon Valley's many Google million- and billion-aires doing likewise. Newspaper philanthropy would hardly be a hot topic of conversation among young founders on the Web 2.0 cocktail circuit.

Craig Newmark: The San Francisco-based Craigslist founder likes to think of himself as being in a different, entirely more altruistic class of startup founder. In the case of newspapers, he does stand apart, and not just because of his instrumental role in ushering along the decline of print journalism: Newmark has a peculiar (for the tech world) obsession with journalism and politics, leading to investments in content aggregator Daylife and citizen journalism initiative NewAssignment.net and advisory roles at the Center for Citizen Media and Sunlight Foundation.

But even assuming he wanted to buy the Chronicle, it would seem a stretch for Newmark to do so on his own. Craigslist throws off maybe $100 million or $130 million in annual profits, which Newmark must split with other shareholders. The Chronicle is losing $50 million a year just operating, to say nothing of the purchase price.

With enough cash from employees, a fire-sale price from Hearst and maybe one or two more rich investors, it's possible to imagine Newmark picking up the paper, should some sort of expensive guilt complex compel him to do so.

The Chronicle would then be the largest nonprofit paper in the country, ahead of the Poynter Institute's St. Petersburg Times.

More likely, though, would-be newspaper philanthropists will come to the same conclusion as would-be newspaper investors: It makes little sense to invest in fixing the old problems of a dying industry when you can net much more glory or profit starting from scratch.

Specifically, the old-fashioned poster tacked on a streetlamp. One appeared near the San Francisco yoga studio from which the glasses were stolen, along with Newmark's Craigslist business card. The description — "Okio brand, brown with turquoise overtones" — closely matches a Craigslist posting which also mentioned the following missing items:

Timbuktu Void Backpack: navy with light blue stripe
-coach black wallet, passport, drivers licence, credit cards, cash, motorola phone, Ayurvedic herbs, grey scarf, grey jacket

Ayurvedic herbs, a grey scarf, a Coach wallet? If this doesn't match your image of Newmark, a diminutive and soft-spoken fellow who rarely meets the eyes of his conversation partners, it's because the glasses and the bag aren't his — they belong to his girlfriend, Eileen Whelpley, according to the Craigslist post. What a mensch! Newmark is willing to expose the ineffectiveness of his website to recover his girlfriend's glasses.

1) Fox News, please let us post clips instead of threatening to sue.

2) Adopt a Digg-like voting system to let the audience choose the questions.

The first demand seems as easy as the second is sure to be rickrolled. (Photo by The Fun Times Guide)

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:

This is just about the finest article I have ever read about the craigslist phenomenom. My respect for Buckmaster and Newmark is increased 100 fold.

People don't understand that at it's core, craigslist is a revolution.

And no one can stop a revolution.
Larry, Minneapolis, USA

The real Craigslist phenomenon is that reporters keep writing up Newmark and Buckmaster as down-to-earth geeks — and Craigslist users eagerly buy the rhetoric. It's a masterwork of propaganda. But it's as true as Buckmaster's apartment is modest.

What we still don't get: Why is Jesse Draper bothering? Most videobloggers we know are hoping to parlay a career covering tech — and by "covering tech," we mean "flouncing around on camera with an iPhone" — into a Hollywood star turn. With "Valley Girl," Draper is going about things backwards.

And hey look, Craig Newmark! And Digg is there, too, suggesting Google might have been serious about buying them when they planned this event. Upload your video to YouTube with this "YouTube Upload Station. The YouTube Upload Station is so much more than a MacBook with a T1 connection because it is a democracy engine.

Go, Google. Go, Barack. Go, getting praise in all the papers for reaching out with social media. But please, massages from a company that misspells iPhone? Save that for the Republicans.

(Photos by Steve Rhodes)

Law.com went to a handful of lawyers to the startup stars to get their unofficial advice on how Craigslist could might have behaved better with counsel in-house, such as wrestling with eBay over the status of the few shares not held by Newmark and Buckmaster. Mike Godwin, general counsel to the Wikimedia Foundation, offered that at his organization no one would blog about a lawsuit in progress, as Buckmaster did. Yes, take a lesson from a lawyer who represents the organization founded by über-slut Jimmy Wales: no matter how nutty Craig and Jim's actions are, having a legal team on the payroll to answer for them is the solution. (Photo: miketippett)

"I think of Craigslist as training wheels," says [sex worker activist Stacey] Swimme. "When a girl wants to work in the sex industry, she ought to able to contact a local union and ask, 'What kind of materials do I need? What training do I need?' Since that's not available, Craigslist is the easiest way."

No comment from Craig Newmark in the Riverfront Times piece, of course. Craig, care to say your piece here about your contributions to the sex trade? Trust me, the girls are grateful.