SUNNYVALE (dpa-AFX) - Yahoo! Inc. (YHOO) and Facebook Inc. (FB) said Friday they have agreed to settle their acrimonious patent disputes, paving the way for cross licensing of their patents.
The two companies also agreed to a new advertising tie-up and expanded distribution arrangements, including collaborating on large media event coverage, as they aspire to entice consumers and advertisers to their respective platforms.
A settlement of patent disputes means that both companies will be able to leverage on their strengths and also benefit each other. Yahoo! alone is said to hold over 1,000 patents.
Trouble began in March when Yahoo filed a suit alleging that Facebook violated 10 to 20 of its patents involving technical mechanisms in Facebook's ads, privacy controls, news feed and messaging service. Yahoo sought unspecified damages, a trial and an injunction against further infringement.
Facebook counter filed, charging Yahoo of infringing upon ten of its patents including photo tagging, advertising, and online recommendations. Five of those patents related to Yahoo!'s online advertising business, which fetched eighty percent of Yahoo!'s revenues in 2011. Facebook too sought unspecified damages.
Yahoo! and Facebook will also 'work more closely and collaborate' on multiple tent-pole and anchor events annually over the next several years. Yahoo! will focus on bringing its large media event coverage to Facebook users by collaborating on social integrations.
Yahoo! interim CEO Ross Levinsohn said, '...We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors.'
Levinsohn further said, 'Combining the premium content and reach of Yahoo! as the world's leading digital media company with Facebook provides branded advertisers with unmatched opportunity.'
According to Yahoo!, since the launch of the original multi-year partnership between the two companies, it has the largest active user base among all news sites that have integrated with Facebook's Open Graph platform.
YHOO closed Friday on the Nasdaq at $15.78, down 0.44%, on a volume of 11.3 million shares. In after hours, the stock gained 0.70%.
FB closed at $31.73, up 0.83%, on a volume of 10.8 million shares. In after hours, the stock gained 0.28%.
Copyright RTT News/dpa-AFX
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