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Yahoo Unfriends Facebook, Considers Lawsuit Over Patent Claim

Yahoo is no longer listed as "In a relationship" with Facebook

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Yahoo Unfriends Facebook, Considers Lawsuit Over Patent Claim
[ Business]

Yahoo’s had a rough go of it so far in 2012 and the company could certainly stand to take a more active role instead of reacting to how the tech world changes around them. So what better way to get back in shape than to pick a fight with the biggest kid in the playground? That seems to be Yahoo’s course of action today as it has openly threatened legal action against Facebook related to patents that Yahoo says the social network has infringed upon.

Yahoo put Facebook on notice today by way of DealBook, a business blog associated with The New York Times. In an emailed statement to the blog, Yahoo said that it has “a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property.” Yahoo is said to be seeking a licensing agreement with Facebook over 10 to 20 patents that include messaging, advertising, and the personalization of Web sites. If Facebook doesn’t agree to pay the licensing fees accorded to Yahoo’s claims, Yahoo has threatened Facebook with a lawsuit.

Going about this potential patent dispute gently wasn’t really on Yahoo’s agenda as it apparently didn’t even notify Facebook of the impending problem. According to Barry Schnitt, a Facebook spokesman, Facebook was notified about Yahoo’s claims at the same time that Yahoo was contacting the Times.

In earnest, Yahoo could have one or more motivations for going after Facebook in this way. One, it’s obviously a great way to re-establish their prominence on the center stage of the tech industry. It could be a part of a broader, more aggressive initiative by Yahoo’s new CEO, Scott Thompson. Maybe as the leaders of the tech industry continue to butt heads and challenge each other, Yahoo has decided to moor their interest with a company that’s not Facebook.

Yahoo talked up the value of its more than 1,000 patents late last year, amid a strategic review that included potentially selling a stake to outside investors.

The patents at issue include some of the first awarded to Yahoo, people close to the company said. It also gained a trove of intellectual property from the 2003 purchase of Overture Services, a search-advertising company that sued companies like Google over patent issues.

It is unclear how much money Yahoo could wrangle out of any potential agreement with Facebook. After purchasing Overture, Yahoo settled the acquired company’s battle with Google in 2004, receiving 2.7 million shares in the search giant before it went public.

Then again, maybe Yahoo liked what they saw in the tea leaves after IEEE Spectrum declared last year that Yahoo’s patents are the most valuable among communication and internet services, and so now they’re going to take their talents to somebody more likely than Facebook to share the wealth.

Any other speculations floating in the heads of those of you floating in the internet out there? Feel free to discuss below in the comments.

Yahoo Unfriends Facebook, Considers Lawsuit Over Patent Claim


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  • Bill V

    All I can say is that I’m dead-tired of everyone using litigation as the core of their business model. Seems like 75% of business news these days is about who is suing whom. Sad.

  • http://unfortallyyahoo don elliott

    idont like facebook,but yahoo has got to go.Please respond.I will get used to facebook.Do something.They cant hold their (heiracy)

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