Yahoo Is Suing Facebook For Patent Infringement

Yahoo is charging ahead with a patent infringement lawsuit against Facebook, according to AllThingsDigital.

Most are puzzled by the move involving 10 patents that Yahoo believes Facebook has infringed; a copy of the suit appears at the bottom of this post.

The suit comes at a time when Yahoo is rumored to be on the brink of widescale layoffs — and Facebook has yet to schedule a date for an initial public offer that could easily value the company at more than $100 billion.

Presumably, Yahoo wants to cash in on the Facebook effect, but the in doing so the portal site is sullying what had been an amiable relationship up until now.

For instance, Yahoo’s integration of Facebook’s plugins had garnered a great deal of traffic for the portal and gotten it a great deal of visibility in the social network’s news feeds, making a strong success story that both could point to.

And that segues to what a spokesperson for Facebook said to us via email in reaction to the suit:

We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.

The spokesperson was referring to the fact that before filing the suit, Yahoo known by simultaneously notifying the media and Facebook about the 20 patents the portal wanted to defend. This time around, we all learned of the suit right when Facebook was served.

On the other side of all this, Yahoo’s statement to members of the media has been:

Yahoo has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.

Meanwhile, it’s worth pointing out that Yahoo has been losing market share to Facebook in online display advertising for a while now, according to eMarketer, which also said:

  • Facebook’s share of overall U.S. display advertising revenues grew to 14 percent in 2011, up from an 11.5 percent share in 2010. Meanwhile, Yahoo’s share of U.S. display ad revenues fell to 10.8 percent in 2011 from 14 percent in 2010. That’s a far cry from 2008, when Yahoo’s share of U.S. display revenues peaked at 18.4 percent and Facebook earned just a 2.9 percent share.
  • This year, Facebook’s share of U.S. display ad revenues is expected to grow to 16.8 percent, while Yahoo will see its share of the U.S. display market fall to 9.1 percent.

Readers, what do you make of Yahoo’s suit against Facebook?

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