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Facebook Yahoo Settle Lawsuits, Tie up in Licensing Partnership
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On Friday, Facebook Inc and Yahoo Inc buried the hatchet to settle lawsuits between them and agreed to form a new broader partnership for internet advertising and licensing. The new agreement settles the allegations of technology patent infringement brought by Yahoo against Facebook. The settlement between the two internet giants comes in the wake of the ouster of ex-Yahoo CEO Scott Thompson over inaccuracies in his resume.

The new strategic deal would see Facebook and Yahoo broaden and extend the current multi-year tie up between the two companies. The agreement allows Facebook users to share Yahoo content and includes the cross-licensing of patents. It also involves collaboration on advertising offerings for major media events like the Olympics.

Sheryl Sandberg, Facebook COO said, “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.”


Yahoo’s company leadership had been going through a troubled phase since they turned down Microsoft’s $44 billion takeover offer in 2008. Since then, there has been a new CEO almost every year at Yahoo without the company settling on a permanent CEO.

Yahoo’s lawsuit against Facebook just before Facebook launched its IPO had drawn criticism as being an attempt to wring cash from Facebook when it was thinking of going public.

Yahoo had sued Facebook in March claiming that Facebook had infringed 10 of its patents including some related to the technology of online advertising. In its lawsuit, Yahoo had claimed that Facebook had been “one of the worst performing sites for advertising” before it tied up with Yahoo and started adopting its ideas. Facebook called the move short-sighted and in its countersuit observed that Yahoo was giving priority to “litigation over innovation.”

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In April, Facebook announced a deal to pay $550 million to Microsoft for hundreds of patents that originated with AOL.


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