Facebook and Yahoo top executives are in negotiations to settle their patent dispute, All Things D's Kara Swisher reported, and an agreement could be announced within the next fortnight. Facebook and Yahoo both filed patent infringement lawsuits against each other, and according to the report, terms of the settlement could include cross-licensing of patents between the two companies, which were once partners, as well as deeper integration of their respective tools.
Yahoo fired the first salvo in the legal battle in March, when it filed a patent infringement lawsuit against Facebook essentially accusing the social networking company of misappropriating most of the technologies that helped it soar into the huge company it is now. Yahoo's suit attributed much of the social networking giant's success with nearly $4 billion in revenues last year to Yahoo patents in social networking, messaging, advertising, and more. Former Yahoo CEO Scott Thompson reportedly pushed the original lawsuit.
Yahoo's lawsuit came as the company has become increasingly more reliant on the social network for traffic. Facebook and Yahoo announced a new feature back in September, which integrated Yahoo News with Facebook so people could see what articles their friends are reading. According to the Facebook developer blog, this integration has more than tripled Yahoo News' daily traffic.
Countersuit
In response to Yahoo's lawsuit, Facebook filed its own patent suit defending its patents, and claiming that Yahoo infringes on 10 of its patents. The patent claims came at a sensitive time for the social networking giant, as it was preparing for its highly-anticipated initial public offering (IPO).
Yahoo's former chief executive Scott Thompson left the company in mid-May after only four months at the helm, going down in flames after it was revealed that his resume was not so accurate. With Ross Levinsohn as the new CEO, Yahoo seems willing to bury the hatchet and focus on more important things. According to All Things D's Kara Swisher, Facebook COO Sheryl Sandberg and VP of partnerships Dan Rose are leading the negotiation on Facebook's side.
"The key terms being discussed, said sources, include a massive cross-licensing of patents between Internet giant and the social networking kingpin and an even deeper integration of Facebook into Yahoo and vice versa, which has been a key element of improved engagement of late on Yahoo," wrote Swisher. "One possible glitch: While Facebook has indicated a willingness to perhaps buy some of Yahoo's valuable patents, sources said the company is not likely to fork over a massive cash payment to Yahoo as part of the deal."
