This is a partial transcript from "Your World with Neil Cavuto," October 25, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Explicit and illicit ads for sex. The site is called Craig's List. It has become wildly popular for its apartment listings and job postings, but its personal section is now raising some eyebrows.

eBay (EBAY) owns a 25 percent stake in this company.

We're going to show you some examples of the racy content on the site in just a moment to illustrate our point.

Joining us now from San Francisco is the CEO Of Craig's List, Jim Buckmaster.

Jim, thank you for coming.

JIM BUCKMASTER, CEO, CRAIG'S LIST: Oh, appreciate it, Neil. Thanks.

CAVUTO: I know, Jim, this is such a small part of what you do, but it's raising eyebrows right now because these ads — these personals — get pretty personal and pretty graphic. Does that cause rankles among the eBay folks?

BUCKMASTER: Well, one thing I will say is that after many years of watching our personals, I realize that I lead a very boring life.

CAVUTO: You and me both, I'll tell you. But I want to go to some examples there, because we have a couple that we've cleaned up a little for our viewers, so I hope you'll indulge us.

BUCKMASTER: Sure.

CAVUTO: I'm not even going to repeat it, but, you know, where someone is talking about in the food for a pretty graphical sexual intercourse. Why is that OK on a site? I wonder if eBay even knew about it.

BUCKMASTER: Well, one thing I would mention, Neil, is there's a distinction between illicit and explicit in that we're very concerned to make sure there's nothing illegal on the site. We go to great lengths to make sure that minors are not in our personal sites.

But with respect to explicit, we tend to take a very conservative approach. Namely our primary emphasis is on honoring the freedom of speech rights that we've all earned and that kind of underpin all of our rights, so...

CAVUTO: So, Jim, when someone talks about spanking and hair pulling and name calling, just a few of the activities that one guy wanted to start off with another woman, that's OK? That's within the bounds of propriety?

BUCKMASTER: Well, a good thing to remember is that, with respect to the explicit stuff, several years ago we kind of demoted ourselves and put our community in charge of deciding what's appropriate and what's not appropriate.

To give you an example, we have this flagging system whereby any user can flag any ad at any time as being inappropriate. If enough other users agree it's inappropriate, it will be taken down off the...

CAVUTO: Have you had that? Have you ever had that?

BUCKMASTER: Oh, sure. Oh, sure.

CAVUTO: How many? What percentage of, let's say the more risque ads you pulled?

BUCKMASTER: Not sure of an exact percentage. And again, it's not us pulling it. It's our users in concert, you know, their collective wisdom which ads need to go and which can stay.

CAVUTO: OK.

BUCKMASTER: It seems to work pretty well.

CAVUTO: All right. Appreciate it, sir. Thanks for stopping by. Craig's List CEO, Jim Buckmaster.

BUCKMASTER: Thank you, Neil.

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