Yahoo and Facebook reported on Friday that they have finally resolved a high profile patent disagreement through a deal, which analysts thought would possibly benefit both sides.
The dispute, involving a patent infringement of Yahoo against Facebook for technologies related to social networking, advertising, privacy, site customization and communications, have finally been resolved. Both firms revealed in a joint statement that they have signed a cross-licensing agreement allowing access to each other’s patent portfolios. They have also copied an advertising partnership and will expand an existing content distribution agreement.
According to Yahoo, under the leadership of former CEO Scott Thompson, it litigated Facebook in March for breaching its patents, including the accused social network’s News Feeds and how its privacy settings are managed.
Yahoo has about 1,000 patents in its portfolio, including 60 or so that originally belonged to Overture Services, which Yahoo acquired in 2003.
Soon after, Facebook fought back and filed its own patent infringement lawsuit against Yahoo. It alleged that Yahoo infringed on several of its patents, one of which was on a technology developed by CEO Mark Zuckerberg. Facebook’s IPO filings revealed that it had 774 patents in the U.S. and 96 patents in foreign markets.
As a means to end dispute, Yahoo CEO Ross Levinsohn and Facebook Chief Operating Officer Sheryl Sandberg represented in the settlement of a plan to broadcast Yahoo’s large event coverage to Facebook users through “collaborating on social integrations on the Yahoo site,” according to their statement.
Thus, according to analysts, it is not far from reality that Facebook will possibly host Yahoo’s content on its own site by incorporating more of its social sharing features into the firm’s coverage of events, such as the upcoming Olympics.
This collaboration brings good news to Yahoo as it can now have a share of the social market dominantly owned by Facebook.
IDC analyst Karsten Weide commented, “Primarily, I think this is Yahoo saying, ‘Oops, sorry we bothered you with the patent stuff. We’re going to go home now. Yahoo can go to [advertising] customers and say, look, you wanted social and we’ve got social.”
On the other hand, Facebook may also probably benefit from accessing some of Yahoo’s content.
According to Gartner analyst Allen Weiner, “One of the real opportunities [for Facebook] moving forward is using their platform to distribute content. Facebook wants to beef up their supply of content that can be shared across the Facebook network. They don’t really have any of their own content, be it original or even aggregated, so Yahoo makes a logical partner for that.”
The patent trials had been scheduled to begin later this month.