While Yahoo's patent suit against Facebook might have looked like an IPO gimmick, it has lasted longer than Facebook's stock high, and might be worth more in the end. The two companies announced that they have entered into an advertising partnership and patent licensing agreement, thereby settling the dispute. The agreement includes patent cross-licensing, meaning Yahoo will gain access to Facebook's newly acquired patents from Microsoft, and Facebook will gain access to Yahoo's patents, including the 10 in question.
In addition to patent licensing, the agreement will also include a mutual advertising partnership. Together, the companies will form an advertising platform that will be available across both Facebook and Yahoo's global properties. The companies will also partner on Yahoo's media event coverage, bringing that existing content to Facebook's userbase through integrated social programs. This all makes sense considering the 10 patents in dispute had to do with media presentation and advertising.
What do the two companies think of the partnership? Hit the break for the reactions from executives at both companies.
Interim CEO of Yahoo!, Ross Levinsohn, said,
We are excited to develop a deeper partnership with Facebook, and I'm grateful to Sheryl and her team for working hard together with our team to develop this dynamic agreement. We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors. Combining the premium content and reach of Yahoo! as the world's leading digital media company with Facebook provides branded advertisers with unmatched opportunity.
Obviously the extended partnership he refers to is the news integration between Facebook and Yahoo! that has already existed. Facebook's COO, Sheryl Sandberg, had this to say about the partnership changes,
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 new leaders are driven by a renewed focus on innovation and providing great products to users. Together, we can provide users with engaging social experiences while creating value for marketers.
Looks like we are going to start seeing both the Yahoo! and Facebook logos a lot more in the near future. This could be good for advertisers, allowing for more diversified audiences for their ads. Amazon might want to start panicking.