Facebook and Yahoo have agreed to settle a patent dispute, averting a potentially lengthy battle over the technology running two of the Internet’s most visited websites.
In dropping the lawsuits, the companies agreed to license their patents to each other. They are also agreeing to an advertising alliance that will expand their existing partnership.
The advertising alliance could help Yahoo recover some of the revenue that it has been losing as marketers shift more of their spending to a larger and more engaged audience on Facebook’s online social network.
Friday’s settlement involves no exchange of money and comes after a months-long patent squabble between the two Internet icons.
The truce ends a conflict provoked by Yahoo’s short-lived chief executive, Scott Thompson, who was dumped from the job two months ago after misinformation on his official biography raised questions about his integrity.
Under Thompson, Yahoo filed the patent lawsuit in March, wielding it as a weapon against a company that Thompson believed had been prospering from the ideas of its older rival.
But Thompson’s attack on Facebook Inc. quickly turned into a public-relations disaster. Much of the technology industry railed against Yahoo’s tactics. Critics viewed the lawsuit as a financial shakedown by a desperate company whose well of innovation had run dry.
The Associated Press
