The mystery of the legal clash between eBay and the online classifieds service Craigslist has been solved.

At the heart of the dispute, as Megan Barnett speculated last week, was that eBay liked Craigslist so much that it launched a direct competitor, Kijiji, in some U.S. markets in 2007.

In a redacted lawsuit that was released late on Wednesday, eBay does not deny that Kijiji would compete, but contends that Craigslist went too far in its response under the terms of a 2004 agreement that gave eBay a 28.4 percent stake in the company. Kijiji has reportedly grown to 10 percent the size of Craigslist in just six months.

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

Months after Kijiji's start in the United States (it began in overseas markets in 2005), Craigslist's owners, Craig Newmark and Jim Buckmaster, "engaged in clandestine transactions" to dilute eBay's stake to 24.85 percent, and prevent it from nominating a new member to Craigslist's board, the suit says.

"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," Buckmaster, Craigslist's chief executive, told Meg Whitman, the C.E.O. of eBay, in an email last July.

Whitman's response, according to the suit, was an offer to buy the entire company.

"We would welcome the opportunity to acquire the remainder of [Craigslist] we do not already own whenever you [and Newmark] feel it would be appropriate," she wrote.

Speculation about a sale or initial public offering of Craigslist has periodically swelled in the wake of rich valuations given to YouTube after Google's $1.5 billion acquisition and to Facebook after Micosoft's investment in it.

Craigslist's top executives have consistently mocked such ambitions, expressing a complete lack of interest in cashing out.

The lawsuit cites an appearance by Newmark on The Charlie Rose Show just days before Whitman's overture. Nemark said that people are always asking Buckmaster how they are going to make more money.

"And we say, 'hey, not interested.' Because once you are living well, and maybe providing for your future, what's the point in more," Newmark said.

Henry Blodget on the Silicon Alley Insider website last month estimated that Craigslist has $80 million in annual revenue and $25 million in operating profit. But Craigslist is run like a nonprofit, he notes.

To get a look at Craigslist's true value, one would have to make certain assumptions about its earnings power, which leads Blodget to conclude that it is a business with the potential to $750 million in revenue and $500 million of operating profit, giving it a valuation of $5 billion.