• by Gavin O'Malley , Staff Writer @mp_gavin, March 13, 2012

Making good on earlier threats, Yahoo is proceeding with a substantial patent infringement lawsuit against Facebook.

“The attack … is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers,” writes AllThingsD. 

“Patent fights are nothing new in Silicon Valley,” notes The New York Times’ Dealbook blog. “But the social-networking world has largely been spared such fights, at least until now.” 

As Reuters notes, however, “Only two of the 10 patents at issue are directly related to social networking technology. Most focus on online advertising, including methods for preventing ‘click fraud.’”

Either way, “Yahoo likely sees a potentially large opportunity in the litigation,” Greg Sterling surmises in Marketing Land. “The timing is inconvenient for Facebook, which is about to go public. However I’m sure the timing is quite calculated by Yahoo.”

As Sterling recalls, Yahoo sued Google over AdWords just as the search giant was preparing to go public. Google settled with Yahoo, agreeing to issue 2.7 million shares of stock in exchange for a license to the intellectual property and an agreement to dismiss the case.

Similarly, as The Wall Street Journal writes: “Some legal experts attributed Yahoo's decision to sue [Facebook] to the company's recent business struggles and the new strategies of [CEO Scott] Thompson, who has said publicly that the company needs to explore ways to generate revenue from new and underutilized parts of its business.”

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

What happens next? Well, “Unless this is part of a bigger blood feud, the sides may very well decide to split the difference and cut a deal,” CNet suggests.

Yet, whether the lawsuit will damage Yahoo’s reputation beyond repair remains to be seen. Calling the suit “a crock of shit,” prominent venture capitalist Fred Wilson writes: “Yahoo has broken ranks and crossed the unspoken line which is that Web companies don't sue each other over their bogus patent portfolios … They are dead to me. Dead and gone. I hate them now.”