Yahoo and Facebook change their relationship status

Krystal Peak · July 6, 2012 · Short URL:

After some legal patent battles, both companies are working on a symbiotic deal

Facebook and Yahoo are settled on a more symbiotic relationship and putting to bed the heated legal battle they have been fighting to cross-license their entire patent portfolios with each other without money changing hands. The deal’s haven't been made public just yet but reports from AllThings D state that the Web companies are entering into an ad sales partnership that will let Yahoo show "Like" buttons in its ads.

This agreement will expand their ongoing partnership, including a joint advertising sales effort, as well as cross-licensing of some key patents between the pair.

The deal squashes most of Yahoo's concerns that the social network's model is based on Yahoo’s patented social networking technology and uses intellectual property that royalty payments alone will not even out.

No actual cash payment will change hands under terms of the deal over the patents but should result in several possible advertising and business deals that could yield substantial revenues.

Facebook and Yahoo did work together on ads in the early days of Facebook but sales partnership status has been lacking in recent years.

Yahoo has, however, always maintained some level of relationship with Facebook since the company uses contact communication so that users can import their Yahoo Mail address book for easy additions of friends.

The legal battle started under the leadership of Scott Thompson, who promised that the efforts would lead to a cash-rich Facebook settlement, which is clearly not the case at the moment. Thompson was ousted from the company shortly after the case began, amid questions about his resume. 

On Thursday, sources told Reuters that Hulu CEO Jason Kilar and current interim CEO Ross Levinsohn are now in the final running for the top job. 

Facebook has been beefing up its patents arsenal. In April, it announced to deal to pay Microsoft Corp $550 million for hundreds of patents that originated with AOL.

More details about the agreement are expected very soon and will provide further insight on how the two Web giants will be working together in the future.


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