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Tuesday, March 13, 2012

Can Yahoo get some facebook money?

Yesterday I posted about Facebook getting ready for a big lawsuit from Yahoo. Well today Yahoo followed their threat and filed suit against Facebook.

From Newser:
Yahoo followed through on its threat to sue Facebook today, filing a suit accusing the social networking company of violating 10 Yahoo patents. The suit, filed by new CEO Scott Thompson, reportedly comes after months of talks between the two companies; it alleges that Facebook got a "free ride" by using patented technology covering everything from messaging to online ads. 

Yahoo is struggling and Facebook is about to go public; suits like this are common in such cases, an expert tells the Wall Street Journal. Another tells Reuters that the timing might make Facebook "more willing to resolve" the differences. 

The suit alleges that Facebook succeeded by using principles "Yahoo had its pulse on" years earlier, a former Yahoo exec says; one example is Facebook's newsfeed, which is similar to Yahoo's patent for custom data streams. "With this lawsuit Yahoo is saying they had the ideas first," the exec says. 

Indeed, the lawsuit quotes Mark Zuckerberg himself, Mashable reports; he once said, "Getting there first is not what it's all about." A Facebook spokesperson says the company first learned of the suit through the media.

Dipping their hands in the Facebook pot o gold

Some say this is Yahoo reaching their hands into Facebook's pockets before the IPO but I don't. I think that these internet companies basically are forced to sue one another so that a court can decide what kind of idea-stealing is legal and what kind is not. All these companies do the same things whether you call them news feeds or timelines or whatever.

Yahoo basically has to sue to make someone decide whether the ideas Facebook got from them constitutes breaking the law. We'll see. I personally think that Facebook will settle out of court and pay off Yahoo a big chunk of dough.

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