Yahoo Files Lawsuit as Facebook Prepares IPO
Author: John Duckgeischel on March 13, 2012 - 10:08 PM
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Just as Facebook makes its final preparations for its IPO, Yahoo has filed an infringement lawsuit covering 10 patents for advertising, messaging, customization and social networking technology.   Perhaps the timing couldn’t be worse for Facebook and conversely perhaps it couldn’t be better for Yahoo.    Facebook is in its SEC-mandated quiet period just before its anticipated $100 billion IPO.  Yahoo wrote in its statement that it 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

For its part, Yahoo may be banking on the fact that Facebook may be more be inclined at this time to quickly settle the case rather than face a protracted lawsuit in court especially with its pending IPO.  Evidently Yahoo had previously filed lawsuit with similar timing against Google in 2004.   That lawsuit result was very favorable for Yahoo, which was granted millions of shares of Google stock.   Yahoo maintains that Facebook’s “entire social model ... is based on Yahoo!’s patented social networking technology.” 

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