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The German baby taken from his parents after they put him up for sale on eBay for a euro--apparently as a joke--is back home, according to the Associated Press.

"The child has been returned to his parents," prosecutor Johannes Kreuzpointer told the AP on Thursday.

The parents had told the authorities the posting had been a joke. Prosecutors eventually agreed and dropped their investigation into child trafficking, the news service reported.

The original ad that ran May 24 stated: "Offering my nearly new baby for sale, as it has gotten too loud. It is a male baby, nearly 28 inches long and can be used either in a baby carrier or a stroller." The parents, both in their early 20s and residents of Unterallgau, were not identified. The bid price, 1 euro, is equivalent to about $1.57.

Otto Gaschler, deputy chief of youth services in Unterallgau, told the AP that the posting was "like a game for them. They never thought that this stupid joke could have such an effect."

Gaschler said he didn't know how exactly how long the infant was away from home but said it was for several days. "The parents always had contact to their son," he noted. A social worker is checking on the family, he told the AP.

Buyers and sellers on eBay are due to get a bigger cushion for transactions gone bad.

At its eBay Live community conference this week, the online auction giant offered details on more generous PayPal protections and incentives for its top sellers, and also feted the anniversary of its Kijiji classified ad service.

Starting in the fall, the company says it will cover 100 percent of an item's purchase price on most transactions for buyers who use eBay's PayPal service, with no cap on coverage. The policy addresses items that are not received by buyers and those that are significantly different from their listing descriptions.

For sellers in PayPal transactions, eBay in the fall plans to boost protection against claims, charge-backs, and reversals connected to an unauthorized payment or failure of an item to arrive at its destination in 190 markets worldwide. The coverage, eBay says, will come at no additional cost to the seller and with no dollar limit.

The current ceiling for buyers' and sellers' coverage generally has been just a few hundred dollars, and sellers had been protected on shipments to only a handful of countries.

Starting this summer, meanwhile, top-rated PowerSellers will qualify for additional discounts based on their customer experience ratings. They could see 20 percent lopped off the commission that eBay charges sellers for sold items and a 23 percent reduction in daily rates for UPS ground shipping.

That move is likely to stir further resentment among smaller sellers already up in arms over existing discounts to top performers.

In addition, eBay noted the first anniversary of Kijiji's debut. While it's clearly pleased to have 4 million unique users per month for the classified ad site, it's also embroiled in a lawsuit filed by Kijiji rival Craigslist that accuses eBay of unfair competition, among other charges.

eBay has pulled the plug on Media Marketplace, a controversial pilot program designed to buy and sell radio and TV advertising on the Internet. The Internet auction house confirmed the closure of the program after one year with the brief message: "We have ended our pilot program in this market."

The system got off to a rocky start, receiving little support from the cable network industry and none at all from the broadcast networks, according to a report in AdWeek. The Cabletelevision Advertising Bureau refused to endorse the system, and only a few of its members--notably Oxygen and Ion--participated in the system. Many complained the system commoditized television ad time.

Last October, eBay officials issued a statement saying, "We've been disappointed by the lack of broad engagement by cable networks. This has caused the initial testing to be slower than expected."

While eBay has abandoned its efforts in selling cable TV ads spots, the company has been working with Bid4Spots on a separate service for selling radio ad time. A notice on the Media Marketplace page urges users to go to Bid4Spots.com for service.

Wanna buy a cute, cuddly Shih-tzu? How about a 1993 Chevy truck? A three-bedroom, two-bath house in Maryland?

Think Wal-Mart.

Wait a second before you decide the big-box retailer has gone gonzo with the concept of selling everything under the sun. It's actually testing the waters with a beta of free online classified ads.

The site, launched last week and powered by Oodle.com, carries more than 40 million listings because it taps into Oodle.com's already-existing postings. Start-up Oodle.com aggregates listings from more than 80,000 local and national sites.

Wal-Mart's free service allows sellers and buyers to post and search for items in seven categories and in major U.S. cities.

The effort is a direct challenge to Craigslist, which offers free ads with the exceptions of job postings in some cities and brokered apartment listings in New York City. However, the two services aren't identical.

Advertisers can pay Oodle.com for higher placement on search results or via an auction-based system.

A report in The Wall Street Journal notes that Wal-Mart has piloted programs in the past before ultimately deciding against keeping them for the long haul. Movie downloads was one of them.

For a bit of entertainment, check out the list of items that can't be sold via Wal-Mart's classifieds.

Anyone who trolls eBay with regularity has probably gotten used to seeing the odd object up for sale now and again. But the Saturday story of a German pair offering their 8-month-old for purchase on the site may end up topping more than a few creepiest-ever-on-eBay lists.

A police spokesperson in the Bavarian town of Krumbach said law enforcement is investigating the couple for possible child trafficking, even though the 23-year-old woman of the duo insists the post was a joke. Authorities, not appreciating the parents' apparently twisted sense of humor, have also put the unnamed baby into state custody.

According to Reuters, a number of people contacted German authorities after spotting the offer on eBay. "Baby--collection only," the post read. "Offering my nearly new baby for sale because it cries too much. Male, 70 cm long and can be used either in a baby carrier or a stroller." Not that the price matters one way or the other, but the parents offered to sell the child for one euro ($1.57).

No one bid on the baby in the two or so hours the post was up, police said. eBay has since taken the listing down.

SAN MATEO, Calif.--Catering to a rising tide of socially-conscious shoppers, eBay this summer plans to help publicly launch WorldofGood.com, a marketplace for buying fair-trade products, according to Robert Chatwani, eBay's general manager of the project.

eBay, in partnership with a separate fair-trade company World of Good Inc., has already built a community site for people interested in goods that are made of recycled materials or produced by fairly treated workers, for example. But the two organizations plan to open a shopping site that will cater to these "social change consumers," Chatwani said here Tuesday at the Dow Jones Environment Conference.

That segment of shopper spends as much as $45 billion on green products annually, he estimated.

"Those people aren't on eBay. We believe only between 7 and 12 percent of these social change consumers are eBay users now ... so this could be accretive to the business," Chatwani said on a panel at the two-day conference.

Chatwani helped conceive of the idea for the WorldofGood.com marketplace three years ago while traveling to India with fellow eBay employees. There, they found some sustainably made artisan products they believed would sell online, and could give some money back to the creator. They tested the idea and it worked. Bay teamed up with World of Good, a group designed to alleviate poverty in third worlds by helping sell local artists' goods globally.

Chatwani said WorldofGood.com is only one project inside eBay that's focused on social change. Historically, eBay has been what he called a low-carbon company, built with more efficient online practices and an emphasis on technologies that are good for the world. But eBay also operates explicitly more charitable projects.

Those include MicroPlace, a micro-finance site for people to invest in entrepreneurs in the developing world. It also runs eBay Giving Works, a shopping site that lets buyers and sellers donate a percentage of sales to a charity. Chatwani said that that site has raised more than $120 million for charities.

For its part, WorldofGood.com will focus on giving people more information about products--where they come from, how they're made, and how they effect the environment, Chatwani said.

"Our challenge is not so much about getting people to spend more. It's about introducing alternative forms of consumption," he said.

UPDATE (3:50 p.m.):To include eBay response.

Craigslist, the Web's No.1 online classified site, has filed a lawsuit against eBay, in a move that will surprise few.

According to a copy of the lawsuit, filed Tuesday in California Superior Court in San Francisco, Craigslist accuses eBay of unfair competition, misappropriation of proprietary information, false advertising, and breach of fiduciary duty. Craigslist has asked the court to force eBay to surrender its interest in the company.

The two companies have been circling each other ever since eBay, which is a minority shareholder in Craigslist, opened a U.S. version of Kijiji, a Craigslist competitor. The hostilities between the Web's top auctioneer and classifieds section were kept quiet until last month when eBay filed a lawsuit against Craigslist alleging that the company tried to dilute eBay's 28 percent share.

The move was designed by Craigslist's founder Craig Newmark and CEO Jim Buckmaster to remove eBay from Craigslist's board of directors, eBay alleged in its suit.

On Tuesday, eBay issued a statement: "We regret that Craigslist felt compelled to resort to unfounded and unsubstantiated claims in order to divert attention from actions by Craigslist's board" adding that Craigslist and eBay always agreed that the two sides have the "absolute right to compete with each other."

The two sides have coexisted relatively peacefully since August 2004, when eBay bought a minority interest in Craigslist. Last summer, when eBay launched Kijiji, Buckmaster told CNET News.com that he wasn't worried about having a competitor sitting on the board. His attitude changed just weeks after when he asked eBay to sell its position in the company, according to court documents filed by eBay.

Meg Whitman, eBay's then CEO, declined to sell but the reasons for Buckmaster's change of heart were outlined in Craigslist's suit.

In the months leading up to the U.S. launch of Kijiji, "eBay used its shareholder status to plant on Craigslist's board of directors the individual responsible for launching and/or operating Kijiji," Craigslist said in its suit.

Craigslist also said that eBay has "hounded" Craigslist managers with "improper demands for confidential Craigslist information, which could be used for anticompetitive reasons."

How would you like having one of your main competitors sitting on your board?

That's the position Craigslist found itself in after eBay bought a 28 percent share of the online classified publication in August 2004. The relationship was cordial until last July 3, when eBay launched a U.S.-version of Kijiji, its own classified Web site and Craigslist competitor.

I thought back to that day when I heard eBay had filed a lawsuit this week against Craigslist founder Craig Newmark and CEO Jim Buckmaster. The online auction service alleged that the men tried to strip eBay of its rights as a Craigslist minority shareholder and attempted to dilute its ownership stake.

When Kijiji launched in the U.S., I asked Newmark and Buckmaster: "Isn't it weird revealing your company's secrets to a huge rival, one who just happens to sit on your board?"

Both men downplayed the problems, but Buckmaster wrote what now appears to be a poignant e-mail: "I'm not a legal expert but I think it's safe to assume (eBay) will continue to conduct themselves appropriately with respect to their responsibilities to Craigslist."

Less than two weeks later, Buckmaster changed his tune and would ask eBay to sell its Craigslist shares. The question now is what made him change his mind so quickly.

To his credit, Greg Sterling, of consultancy Sterling Market Intelligence, whom I interviewed for the July 3 story, predicted there would be trouble. Speaking then about eBay's position as a Craigslist board member as well as a competitor Sterling said: "There is definitely a conflict of interest."

Anybody who has ever heard Newmark speak knows how much the online classifieds publication means to him. He has never given any indication that he is interested in cashing out. According to the lawsuit, Newmark once said: "Death is my exit strategy."

But Newmark's desire to keep control of Craigslist led him and Buckmaster to violate eBay's rights, the auctioneer alleges.

After reading the 29-page complaint, the positions of both sides comes through clear. Newmark and Buckmaster are uncomfortable with one of their main competitors sitting on their board, and eBay makes no secret of its desire to gain control of Craigslist.

Their positions were revealed in correspondence last year between Buckmaster and former eBay CEO Meg Whitman.

Last July, just a week after eBay launched a U.S. version of Kijiji, Buckmaster wrote to Whitman: "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."

Whitman wouldn't hear of it.

"We are so happy with our relationship with the company," Whitman wrote back, "that we could neither imagine...parting with our shareholding in the company under any foreseeable circumstances. Quite to the contrary, we would welcome the opportunity to acquire the remainder of the company we do not already own."

A judge will decide whether Buckmaster and Newmark violated eBay's rights when it made moves that eBay alleges were aimed at limiting its ability to sell its Craigslist stake, diluted its shares to less than 25 percent and prevented eBay from appointing board members.

The auctioneer also accuses Buckmaster and Newmark of violating their fiduciary duty.

Update 9:45 a.m. PDT: Added details about the company's venture capital funding.

Wigix Chief Executive James Chong is nothing if not ambitious: he thinks he's got the recipe for an Internet marketplace that will rival eBay.

Chong, who was the architect of Charles Schwab's online trading platform, believes eBay's design is best suited to auctions of collectible, one-off items. But for those buying Sony PlayStations, digital cameras, or other mass-manufactured items, he thinks Wigix--"Want It Got It Exchange"--has the better approach.

Wigix plans to launch the public beta of its online trading system on Tuesday and fully launch by the fall. It uses a Nasdaq-style price-matching mechanism: sellers and buyers can list their desired prices for a particular item, and the system will notify people when they have matching orders. Wigix also sells ads that can be targeted for the various categories and products on display.

"Why is eBay bad? It uses an auction model (good for) collectible, unique items," Chong said. "For selling items like cell phones or iPods, it's not a good platform."

Ultimately, Chong hopes to encourage people to list all kinds of things they own, making a liquid market out of just about anything, complete with a ticker that shows recent transactions and charts to show historical prices. Maybe you don't have any particular plan to sell your first-generation iPod, but perhaps you'd reconsider if Wigix told you somebody would pay $50 for it, he said.

To lure users, the Oakland, Calif.-based start-up also has a community-building twist: the company offers revenue-sharing perks to users who, in effect, help run Wigix. In addition, there are no listing fees, and people's buy and sell orders don't expire unless explicitly set to.

Wigix has about 25 employees and a dozen or so contractors; seventeen of the employees are in China, Chong said. The company recently raised $5.34 million from Draper Fisher Jurvetson and other angel investors, including Bill Burnham of Inductive Capital, Wigix said.

Some of the community-building and revenue-sharing ideas are smart. But the company faces significant obstacles when it comes to dethroning eBay.

For one thing, eBay operates on a massive scale, and a marketplace's utility is tied to its quantity of buyers, sellers, and items for sale. For another, used goods may not always be the commodity-like products for which Wigix is adapted at the outset.

eBay didn't comment for this story.

How Wigix works
In contrast to eBay's system, Wigix charges no listing fee, and any transaction less than $25 is free. When the fees kick in, Wigix always charges the buyer $1.50, but the seller pays a variable amount: $1.50 for a sale between $25 and $100; $1.50 plus 2 percent of the amount above $100 for a sale between $100 and $1,000; and $21 plus 1 percent of the amount above $1,000 for a sale of more than $1,000.

For example, if somebody buys a digital camera for $200, Wigix charges the buyer $1.50 and the seller $3.50--$1.50 plus 2 percent of $100.

The ask/bid method is only one difference from eBay. Another is that the company provides community members ways to make money by helping to run the site.

When a member adds a product description into Wigix's inventory of SKUs--stock-keeping units--the member gets 5 percent of the transaction fees and advertising revenue derived from that site. In the camera example above, in which Wigix gets $5 in fees, that would be 25 cents.

Such a member is called a "homesteader," to indicate Wigix's hope for a land grab that will flesh out product categories, make it easier for other users to add inventory, and keep categories up to date with new products.

Another way to make money is to become a category expert, a person whom the company appoints to oversee a category such as "Rolex watches," for example, by accepting or rejecting homesteaders' SKU submissions. Category experts get 1 percent of Wigix's fee and ad revenue for that category, Chong said.

Homesteaders and category experts have to work for their money, though.

Homesteaders must be "active members" who, at least once a week, blog about products, write in forums, buy or sell something, refer friends, or take a variety of other actions. And category experts shouldn't expect much in the way of vacation: they "must review, approve, or reject item submissions made for their category at least every three days. They must respond to user queries, update their blogs and discussion boards, as well as manage the category taxonomy and item-level characteristics, one to three times per week."

One other community-building incentive: members who refer others also get a 4 percent cut of those members' homesteading revenue.

Although eBay is the target, Wigix is relying on what it's built: members must be members of its PayPal online payment system to join Wigix. Wigix plans to add other mechanisms later.

Chong also said eBay sellers can import their eBay catalogs. And the company plans to have customer storefronts for power sellers starting in July.

Challenges
Sounds good, right? Everything is for sale, and those who help out get a piece of the action.

There are some potential problems, though.

First is scale. Even with some incentives to join Wigix, the scale of eBay is formidable.

Here are some of its statistics from the last quarter of 2007, the last for which statistics were available: eBay has 82.3 million active members, processed sales of $2,039 in goods every second, and had about 115 million items listed for sale at any given moment.

Those numbers reflect not just the size of the marketplace, but also the scale of the computing infrastructure the company has constructed, along with corresponding infrastructure for fraud detection, dispute resolution, and international sales. And eBay benefits from transaction histories that let buyers and sellers judge each other by reputation.

Another issue for Wigix is just how "SKUable," as Chong says, everything is. When it comes to goods for sale, there are plenty that are easily described with a product name and a check mark next to "good," "new," or "poor." A 4GB 133X SanDisk CompactFlash card seems pretty straightforward, for example, and there aren't that many iPod models to pick from.

But what if you're buying a car, one of the areas for which Wigix has a category? There's a lot a buyer might want to know about repair history, windshield condition, or other details that don't easily fit into the handy taxonomies. And how often are sellers going to update their listings with the latest mileage?

When I was perusing the hottest area so far on the pre-beta Wigix, Nintendo Wiis, I didn't notice any easy way to distinguish why I should buy user birdie's for $500 rather than user kevinchung's for $700. Or, for that matter, why I should buy either over a $250 new one from a store?

There's a field for "additional info," but neither had filled it out. Even if they had--perhaps adding various games or controllers to the list to explain the price tag--it appears that a single SKU isn't necessarily the best way to represent a Wii for sale. Bundling accessories for sale doesn't match well with a single-SKU view of commerce.

Fundamentally, though, Wigix's style appeals to me.

I don't have to worry about many of eBay's hassles or about my Craigslist posting rapidly scrolling off into oblivion. As long as I'm not in a hurry and the site can attract some members, Wigix seems a good low-risk, low-cost way to handle buying or selling something like a book or CD, and wait until the right price comes along.