Yahoo and Facebook on Friday announced settling their patent dispute and entering into a new advertising and distribution alliance.
Yahoo sued the social networking powerhouse site in February, alleging infringement of 10 patents related to social networking and online advertising. At the time, the action was widely viewed in the high-tech industry as a cynical ploy by Yahoo to shake down Facebook in the months leading up to its IPO. Facebook then countersued Yahoo in April, accusing the Web portal of stealing its own patent-protected technology.
Under their agreement, which includes cross-licensing of patents, the companies said they will jointly “bring consumers and advertisers premium media experiences promoted and distributed across both Yahoo and Facebook.” They also plan to collaborate on multiple “tentpole” and anchor events in the next several years, combining Yahoo’s live event coverage with social integrations via Facebook.
On the ad side, the companies pledged to partner on providing joint sponsorship opportunities for advertisers.
According to AllThingsD, which first reported on the settlement, the companies had been in talks to end the patent litigation almost immediately after the Yahoo board removed ex-CEO Scott Thompson in May. The new partnership marks an expansion of the companies’ ongoing relationship, which includes Yahoo’s news reader app for Facebook’s platform that has 37.4 million monthly active users, according to AppData.
Details of the agreement were not disclosed, but AllThingsD reported that no cash is changing hands in connection with the patent settlement. “I’m pleased that we were able to resolve this in a positive manner and look forward to partnering closely with Ross and the leadership at Yahoo,” stated Facebook COO Sheryl Sandberg.
For Yahoo interim CEO Ross Levinsohn, the settlement removes a cloud still hanging over Yahoo from Thompson’s brief but tumultuous tenure. It paves the way for broader dealings with Facebook. It also follows closely on partnerships Yahoo has struck with outside media providers, including Spotify and Pandora, to help revive its music offerings, and CNBC to bolster Yahoo Finance.