We have extensively covered the patent war between Facebook and Yahoo in the past. The fight was going to have no winners and looked to just drag on as both companies accused each other of incriminating patent infringement. Thankfully, it seems that both companies have decided to give peace a chance.
All Things D is reporting that Yahoo and Facebook executives have brokered a deal that will end the patent war between the two and lead to a newfound cooperation. It seems that the settlement won't actually involve either company turning over money to the other. The deal will instead expand their current partnership to include a joint advertising effort and cross-licensing of each other's patents.
The deal is a win-win for both as neither want to be embroiled in unnecessary legal battles. It not only reflects poorly on their stock market performance, but it only hurt an already hurting Yahoo. With this deal, Yahoo hopes to gain more revenue due in part to piggybacking on Facebook. Facebook will also potentially license more patents from Yahoo going forward which would be a great revenue boost to the company.
Even though both sides came out better as a result of this deal, it would appear that Yahoo benefits the most. It was revealed that Yahoo will be the first Facebook partner to feature the number of "Likes" a brand has in ads outside of Facebook. That's a huge deal, and one that could potentially bring Yahoo more ad dollars their way.
The most interesting thing about this deal, however, is the timing. It appears that former CEO Scott Thompson was the one behind the Facebook lawsuit as he thought it would bring in millions if they were successful. Of course, as you can see, Thompson is no longer with the company and that helped them move towards a peace agreement with Facebook.
As of now, none of this official though. An announcement is expected later today, but it shouldn't contain any information that you don't already see here. If it does, we'll update this story to reflect any potential bombshells that the two companies drop in the announcement.