Yahoo, Facebook to play nice again

Just months after Yahoo CEO Scott Thompson’s highly publicized ouster, Yahoo and Facebook—friends before patent litigation turned them into foes—are now back to being partners. The companies have not only settled their patent dispute, which was launched under the leadership of Thompson, but they’ve entered into a content and advertising partnership. The reason for Yahoo’s about-face? “While many still felt Yahoo had a strong case, backed by important intellectual property in a range of key digital arenas, Facebook was prepping for a long and expensive battle by girding its patent defenses,” explained AllThingsD’s Kara Swisher. Plus, Yahoo’s lawsuit had earned the wrath of many in Silicon Valley, where patent litigation is often considered to be a cheap shot at rivals. “How dumb an idea was Yahoo’s decision to sue one of the most powerful and influential companies in technology today, one that had been a partner up to then?” asked Forbes’ Robert Hof. “So dumb that the settlement doesn’t include monetary considerations to Yahoo at all, beyond a vague promise to work together more closely in the future.”

Indeed, no money exchanged hands with the settlement. Instead, the companies inked a cross-licensing deal to allow access to each other’s patents portfolios, and they also formed a new advertising partnership. So what does Yahoo get out of it, if anything? “The advertising alliance could help Yahoo recover some of the revenue that it has been losing as marketers shift more of their spending to a larger and more engaged audience on Facebook’s online social network,” noted the AP’s Barbara Ortutay and Michael Liedtke. “Facebook, in turn, gains the opportunity to show the ads tailored to fit the individual interests of its 900 million users in other heavily trafficked areas besides its own website.” The other obvious win for Facebook is that the deal shows it’s not about to rest on its laurels when it’s under attack. As GigaOm’s Jeff John Roberts wrote, Facebook “not only averted prolonged and costly court proceedings but also served notice on other companies that it will hit back hard against future patent lawsuits.”

• Yahoo, Facebook Kiss And Make Up, Ending Crazy Patent War (Forbes)

• Yahoo, Facebook strike patent truce, ad alliance (Associated Press)

• Yahoo and Facebook Strike Patent Peace Deal, Significantly Expanding Ad and Content Partnership (AllThingsD)

• Facebook, Yahoo Kiss and Make Up (Wall Street Journal)

• Facebook and Yahoo make patent peace (GigaOm)

• Yahoo and Facebook Settle Patent Lawsuits (NY Times)

• Yahoo, Facebook Settle Patent Dispute (PCWorld)

• Yahoo, Facebook said to reach settlement in patent dispute (Bloomberg)

• Yahoo, Facebook drop patent suits, team up on ads (San Francisco Chronicle)

• Yahoo v. Facebook enters the annals as a big waste of money (CNET News)

• Yahoo and Facebook settle patent lawsuit, establish deeper ad deal (VentureBeat)