In Facebook Patent Lawsuit, Yahoo Fails To See The Big Picture

Among the things I didn’t do this week is avail myself of a homeless person ‘s hot spot. Primarily, this was because I didn’t go to SXSWi, but it’s also because the idea didn’t exactly go viral, though chatter about it certainly did.

I’m not quite sure what BBH intended to get out of that whole gambit, but I do know this: The agency wasn’t expecting what it got.

My ain’t-going-nowhere state of affairs left me tethered to the Netgear router in my home office, with some quality time to ponder another bit of digital-era peculiarity: the decision by Yahoo to sue Facebook over a bunch of patents.

I am not an expert in patent law, but, maybe it doesn’t matter. The particulars that do matter have little to do with court papers, and everything to do with the difference between a portal and a social networking site. Yahoo obviously realizes that the true strength is in the latter.

To spend a minute or two summarizing the details, Yahoo’s suit claims that Facebook infringed on 10 patents having to do with intellectual property. They range in focus from privacy to advertising, and also -- per The New York Times’ Dealbook blog -- cover specific areas of social networking, messaging and customization. In case you were wondering, according to the U.S. Patent and Trademark Office, intellectual property is: “imagination made real. It is the ownership of [a] dream, an idea, an improvement, an emotion that we can touch, see, hear, and feel. It is an asset just like your home, your car, or your bank account.”

So, in other words, Yahoo is says it thought of a bunch of things first. Per the suit, these thoughts include things like “Control for enabling a user to preview display of selected content based on another user’s authorization level” and ““Method and system for optimum placement of advertisements on a webpage.”

Leave to one side for a minute, that, if that’s the case, Yahoo should probably be suing lots of companies. The core issue is that all of the patents that Yahoo owns failed to add up to one thing: Facebook.

In other words, Facebook got the big concept -- that there was more power in connecting people with people than in connecting people with content, that all of the customization features in the world can’t compare with people-driven customization, and what’s interesting to your friends will probably be more interesting to you. And that’s the difference between a portal and a social network. Portals are mainly “sticky” -- to the extent they are anymore -- because of their content and the services they provide. A social network is sticky because of the interconnectedness of the people on it -- something that, at this point, a portal would have a hard time replicating.

As Yahoo’s sagging fortunes will tell you, the company’s executives, present and former, no doubt wish they’d thought of that. To make the saga even more peculiar, through its partnership with Facebook, Yahoo has actually benefited from what might be called the social network’s interpretation of Yahoo's  intellectual property. Per Dealbook: “The net effect had been to bolster Yahoo’s traffic from Facebook users by about 300 percent from September to December alone.”

Yes, this lawsuit is all about biting the hand that feeds, which, just like what Yahoo is suing over, shows the difficulty the company has in seeing the big picture.

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