Yahoo appears to be turning to patent licensing to boost its fortunes, picking a fight with Facebook.
The web pioneer is threatening legal action against Facebook if the social-networking giant does not agree to license 10 to 20 patents held by Yahoo, according to The New York Times. The patents at issue relate to advertising, website personalisation, social networking and chat services, the newspaper reported, citing unidentified people who were briefed on the matter.
Yahoo didn’t respond to a request for comment by ZDNet Australia‘s sister site CNET, but told the Times, “We must insist that Facebook either enter into a licensing agreement, or we will be compelled to move forward unilaterally to protect our rights”.
Facebook said it had only just learned of matter, and could not comment without further study.
“Yahoo contacted us at the same time they called The New York Times, and so we haven’t had the opportunity to fully evaluate their claims,” a Facebook representative told CNET.
The news comes as Yahoo has grown increasingly dependent on Facebook for traffic. The two companies announced a new feature last September that integrates Yahoo News with Facebook, so that people can easily see what articles their friends are reading. Since integrating with Facebook, Yahoo News has seen its daily traffic more than triple, according to a Facebook developer blog.
Yahoo’s fate has been in a state of flux since a leaked memo from Yahoo co-founder Jerry Yang indicated that the company could be for sale. One of the most storied companies of the web’s first phase, Yahoo has been plagued in recent years by a tepid stock price, a high employee-attrition rate and sputtering product-development efforts.
The patent claims come at a sensitive time for Facebook, which earlier this month formally declared its intent to raise US$5 billion in an initial public offering (IPO) later this year. Just months before Google’s IPO in 2004, the future web behemoth settled a patent-infringement dispute with Yahoo by agreeing to issue 2.7 million shares of common stock to its one-time partner.
Patent fights have become a popular source of revenue lately, especially in the smartphone sector. Google recently paid US$12.5 billion for Motorola Mobility, an acquisition that initially surprised many until Google said that it was interested in the troubled mobile-phone maker mainly for its strong patent portfolio. Motorola has mixed it up with Apple in several courtrooms around the world, but the two recently clashed over patents in Germany, forcing Apple to temporarily remove older iPhones from its online store in that country. Apple has had several spats with Samsung, with the two companies arguing for months over when to set hearing dates to settle claims of patent infringements on Apple’s iPhone and iPad products.
Meanwhile, Microsoft has inked patent-protection deals with half the world’s original design manufacturers, which pay undisclosed royalties to the software giant for use of Google’s Android and Chrome operating systems used in smartphones, tablets and other consumer electronics. Rather than going after Google for patent violations, Microsoft has targeted device makers, pressing them to license Microsoft’s patents that it alleges Android and Chrome infringe upon.
Via CNET
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