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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.

Craigslist's headquarters in San Francisco's Sunset District

(Credit: Greg Sandoval)

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.

The mystery over what prompted eBay to sue Craigslist last week appears to be solved.

Apparently eBay feels that its ownership stake in Craigslist was unfairly reduced following eBay's launch of rival online classifieds service Kijiji, which went live overseas in 2005 and in the U.S. in 2007, according to the 26-page lawsuit filed in Delaware's Court of Chancery and made available by eBay on Wednesday.

According to the heavily redacted, public copy of the complaint, which names Craigslist founder Craig Newmark and CEO Jim Buckmaster, Craigslist views Kijiji as a competitive activity that cancels some shareholder rights that eBay acquired in 2004 when it bought a stake in Craigslist.

In response to that, Craigslist reorganized its stock structure in January, reducing eBay's stake in the online classified site from 28.04 percent to 24.85 percent. The reduction mean that eBay loses the ability to elect a director.

However, eBay feels Craigslist overstepped its rights and has filed suit over the diluting of its stake.

"The original agreement between the two parties always envisioned that there could be competitive activity," eBay spokeswoman Kim Rubey told the Associated Press.

The lawsuit also discloses that Meg Whitman, who was CEO of eBay at the time, offered to buy the remainder of Craigslist in a letter to Craigslist in July 2007. Whitman's letter was in response to a letter Buckmaster sent that expressed "'negative' feelings toward eBay's launch of Kijiji," and that stated "we are no longer comfortable having eBay as a shareholder."

Whitman responded by saying that eBay had taken steps to "firewall off" its Kijiji operations from the corporate management of its equity stake in Craigslist, according to the suit.

She went on to say that eBay was "so happy" with its relationship with Craigslist that "we would welcome the opportunity to acquire the remainder of (the company) we do not already own whenever you and (Newmark) feel it would be appropriate," according to the lawsuit.

Craigslist plans to make a formal response to the complaint in the next few weeks, the company said on its blog.

"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," Craigslist's blog said.