It's an amazingly useful social service provided by a private company that happened to reluctantly acquire EBay as a minority shareholder in November 2004 when an early shareholder sold his shares to the online auction giant.

Initially Mr Newmark and Mr Buckmaster agreed to the sale because they were impressed by EBay's stated common values. They were also impressed by Ebay's founder and chairman Pierre Omidyar and his widely publicized philanthropic activities and they asked for him to be Ebay's representative on the Craigslist board believing he had " a moral compass similar to its own."

Things started falling apart very quickly as Ebay demanded more control over Craigslist and access to competitive information. The falling out between the two companies is now the subject of of two lawsuits filed against each other. Ebay has complained that Craigslist illegally reduced its minority holding and this week Craigslist complained that Ebay stole proprietary information and engaged in other nefarious activities.

On the Craigslist blog:

We filed a complaint in California today, charging eBay with unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.

The text of Craigslist's complaint makes for fascinating reading and provides an inside peak into a very private company.

Full text of the complaint

Reuters story by Eric Auchard: Craigslist sues eBay, alleges corporate spy plan

Health is a tricky area for Google. I remember chatting about this subject with Wayne Rosing in 2005, at the time he was head of all Google engineering.

We talked about the problem that Google has to do things by machine. That's the secret to understanding Google. Google uses machines and software to produce its results. This is what protects it from any liability that it directly or deliberately produced anything that was a decision by an employee, or an agent of the company, which could trigger a lawsuit or violate a law.

That's what Wayne Rosing spoke about: how do we provide medical information that can make a difference to people and save lives while at the same time avoid the information that is BS and avoid the legal liability of directly advocating a particular medical course of action? Mr Rosing was speaking from personal experience.

Judging by Google's invite it has figured out this problem. It's taken more than 3 years to do it and I'm going to be very interested in seeing how it solved this problem.

And since it has, Google can reap a lot of pharma gold. Just look at the huge amount of money that pharma pumps into TV advertising. I've no idea what "the purple pill" is but plenty of people respond to those ads and they generate a lot of revenue for the pharma companies.

Imagine those advertising dollars used in Google Health, targeted much more precisely at those people that do know what the purple pill is...Pharma advertising via GOOG can potentially result in more sales at a sharply lower cost of marketing. That's a very compelling message.

Take a look at this from Science Daily January 2008:

A new study by two York University researchers estimates the U.S. pharmaceutical industry spends almost twice as much on promotion as it does on research and development, contrary to the industry’s claim.

. . . the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion.

Big Pharma Spends More On Advertising Than Research And Development, Study Finds

My quick calculation shows $57 billion for promotion... GOOG's revs in most recent quarter were $5.19 billion. Clearly there is lots of pharma gold for the picking. Even just the low fruit would substantially boost GOOG's overall business.

But it'll be interesting to see how Google manages to avoid some of the legal issues and just how useful the GOOG virtual MD proves to be.

- - -

Please see: Healthline: The search for pharma online gold - drug makers seeking drug takers.

Google Health Login Page

Official Google Blog: A pilot with the Cleveland Clinic for health information access

Official Google Blog: Google Health, a first look

Next week at Microsoft's Silicon Valley campus in Mountain View you can take a look at some of its advanced technologies and products direct from its labs. Unlike prior Microsoft labs events that are open only to the media and analysts, this one is open to all. Bring your kids too!

Thursday May 22nd. 1065 LaAvenida, Building #1, Mountain View, CA. 12.30pm to 4.30pm.

To register for the event, please go to http://www.ustechsregister.com/MSRRoadshow and use RSVP code MSRMay to sign-up.

Here is Microsoft's description:

Clearstone Venture Partners, the D. E. Shaw group, and an angel group led by iParadigms chairman Steven Berger. The new financing will be used to support product development and add more talent to the team.

Veodia just added a heavyweight from the enterprise IT space:

Etay Gafni, who comes from SAP and joins the company as VP Products. Mr. Gafni brings more than 13 years of experience in product development, user-experience, community development and global management. He was one of the founders of the SAP Developer Network and worked closely with the office of the CTO.

Veodia is interesting because of its focus on the IT enterprise space rather than on the consumer video space, where many companies have had to abandon some of their user generated video strategies.

Veodia operates its own infrastructure and it optimizes the load on the network to ensure a high quality video product. Veodia describes itself as "The Live TV Studio In Your Browser" and that's a very accurate description. Using nothing more than your computer and an inexpensive camcorder, it is really easy to create a video presentation on-the-fly. Veodia takes the video and converts it into the MPEG-4/h.264 format, which has quickly become the standard for video because of its small file size and high quality resolution.

The Veodia setup doesn't require any knowledge of video formats, video editing software, conversion into different formats, etc. These are often obstacles to users generating video presentations. Veodia handles all of that in the background and the result is a high quality video in a format that can be broadcast live or re-broadcast as part of an archive.

Veodia's focus on the enterprise space is smart because there is money in the enterprise and its no-fuss approach means that users can be productive instantly.

Here is a Silicon Valley Minute from Guillaume Cohen:

With that much money you'd have to make a couple of hundred early stage investments which is clearly not possible. The VCs wouldn't have enough time to find, make, and nurture such investments.

Sramana Mitra:

There is only one reason for raising these humongous funds: Raw greed for larger and larger Management Fees.

It's not the first time Sramana Mitra has taken on VC firms in boasts that they finance early stage startups.

Here’s an excerpt from one of NEA’s press releases: “Practicing classic venture capital for over 25 years, NEA focuses on early stage investments, playing an active role in assisting management to build companies of lasting value. With $6 billion under management, NEA’s experienced management team has invested in over 500 companies, of which more than 150 have gone public and more than 200 have been acquired."

NEA is a great firm, indeed one of the classical institutions of the industry. Precisely why they should be slightly embarrassed to utter “early stage” and “$6 Billion under management” in the same breath!

I agree. It's the angel investors who take the risks and invest and nurture Silicon Valley startups. It is angel investor networks such as TiE and Silicom Ventures that do the real heavy lifting around here.

BTW TiE's excellent annual conference is coming up May 16 -17 in Santa Clara. Don't miss it!

EDS's performance has been lackluster reports Reuters:

"Unless HP has some synergies where they can dramatically impact earnings growth of EDS, I'm not sure why they'd want to buy it," said Jim Huguet, co-chief executive at Great Companies LLC. He noted that EDS's earnings growth has averaged 2.8 percent.

"EDS is trading at about half its historical PE, so they're obviously seeing it as a value, which it is if you can generate earns growth at 15-20 percent. But my question is whether it will become a drain on Hewlett-Packard?"

In April, EDS reported a 62 percent decline in first quarter profit, though the results had topped Wall Street expectations. Despite the beat, analysts said EDS faced intense competition from Indian rivals and saw little catalyst for growth.

Foremski's Take:

• - HP CEO Mark Hurd is seeking to capitalize on HP's renewed momentum and take on rival IBM by beefing up IT services.
• - EDS has a solid IT services business with a lot of government contracts that could help balance out a possible recession in other industry sectors.
• - There might seem to be a large cultural difference between the two companies but Compaq, which HP acquired in 2002, was headquartered in Texas.
• - HP would still need to gain a high-end IT consultancy business in order to compete with IBM.
• - Another area that HP still needs to address is in its middleware software business.
• - The timing is quite good. It is best to try and complete such a large acquisition and integration during times of economic slowdown so that the combined entity is firing on all cylinders when boom times come around again.

Please see Dennis Howlett: HP to take out EDS: does it make sense?

Is it a good idea? Click here to leave your opinion.

Harry McCracken, PC World's Editor-in-Chief is leaving the magazine as it celebrates its quarter century anniversary.

I'm one lucky guy. In my position as editor in chief of PC World, I have one of the best jobs in technology journalism. I get to do work I thoroughly enjoy, and to be part of a remarkable team who serves an equally remarkable universe of online and print readers. PC World turns 25 this year, and I've been very proud to be associated with it for over half of that quarter century. When I joined the staff in October 1994 as an associate editor, I never, ever would have believed the ride would last this long.

I could happily do this job forever--but new challenges are good, too. And here's a bit of breaking news for you: After giving it a lot of thought, I've decided to step down as editor in chief and launch a technology site of my own--one that I'll build from scratch and launch this summer.

Read the rest here: PC World's Techlog My New Adventure

That's how I came across an early newsletter from journalist Don Hoefler, who first used the term "Silicon Valley."

In one early issue of his newsletter from 1975 he cites a medical study that shows that Silicon Valley managers have a 75 per cent rate of thyroid problems compared with the overall population of 12 per cent -- all caused by work related stress!

The symptoms include: inability to translate thoughts into actions; rambling writing; inability to get ideas across; and "a tendency to sweep problems under the rug."

A psychologist is quoted: "A superior under stress will tend to feel more comfortable with weaker and less capable suboridnates. A subrdinate under stress will tend to feel that his boss is over-demanding and 'out to get him."

Anybody you know?

I also came across the Silicon Valley Tarot deck and an online reading. My question was: what should I do? In the context of Life, the Universe, and Everything.

I drew the cards: Salesman of Disks, Venture Capital, and Double Latte.

"You know, you should pay more attention to those ambulatory hallucinations you're having. Oh, sure: they'll say you're psychotic if you talk about them, but if you act on them, they'll think you're brilliant."

Excellent advice.