The measures are part of an agreement between Craigslist, NCMEC, and attorneys general of more than 40 states. The move was spearheaded by Connecticut Attorney General Richard Blumenthal.

"The incidence of crime on Craigslist is actually exceedingly low, considering the tens of millions of legitimate ads posted each month by well-intentioned users," said Jim Buckmaster, CEO of Craigslist.

"But no amount of criminal activity is acceptable, and as Craigslist has grown, we have become aware of instances where our free services were being misused to facilitate illegal activities."

Craigslist says because of its growth, businesses have sprung up selling software and other services designed to get around its terms of use. The company said it has filed 14 lawsuits against such businesses and is sending "cease and desist" orders to a number of companies and individuals offering such services. Craigslist said it will investigate and pass along information to local authorities of those involved in criminal activity.

Craigslist said it has put a phone verification system in place for the "erotic services" section of its site, requiring a working phone number for postings and enabling blacklisting of phone numbers for those who post inappropriate ads.

The company also said it has plans to introduce credit card verification and a small fee per ad for posting in "erotic services," to promote compliance with site guidelines.  Craigslist said ads that violate terms would be removed without refund and all of the revenue from these ads will go to charity.

"Requiring credit card verification, and charging a fee to post in this category raises accountability to a point where we expect few illicit ads will remain," said Buckmaster. "For those that do persist, telephone and credit card information will be available to law enforcement via subpoena."

In a blog post from Craigslist CEO Jim Buckmaster he writes," 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."

In eBay’s suit against Craigslist it charges that the company’s two primary shareholders, founder Craig Newmark and CEO Jim Buckmaster deliberately altered Craigslist’s shares and corporate rules to weaken eBay’s share in the company.

Their actions "are a thinly disguised strategem to force eBay to sell its share to them at a below-market price," eBay’s lawsuit said.

The disagreement began when eBay launched Kijiji.com, its own version of an online classified site in the U.S. last year. The site originally launched overseas in 2005.

 Buckmaster Speaks Negative Publicity

At the MediaGuardian.co.uk Changing Media Summit in London Buckmaster said," In the US the attitude of newspapers toward us has evolved. There were positive stories in the early days that has now reversed. Journalist friends of ours say that they have been told not to write positive stories about us."

Buckmaster said there was "enthusiasm" shown for writing negative stories about Craigslist. "I don’t mean it [the accusation] as a complaint, it is a factual answer we are seen as a primary competitor by newspapers," he added.

Buckmaster said in the future people will view Craigslist as "laughably crude." "It is still the early stages," he said, referring to the development of Craigslist. "If you look back 10 years from now the technology will look laughably crude."

Craigslist originally launched in 1995 and Buckmaster said there are significant differences between the strategy start-ups use now and how it was when the site first launched. "This time around you don’t see companies so eager to take on VC [venture capital] money, it narrows their options, and if they do take it they are taking it a lot later [in their growth cycle]," he said. "Companies are taking more diverse strategies this time around."

eBay owns around 25 percent of Craigslist and Buckmaster says they have been a fairly hands off backer. " A lot of dire predictions were made when it was made public that eBay had a stake," he added, saying that "three to four years later" the relationship had not negatively impacted the Craigslist operation.