Shots have been fired in Silicon Valley. Yahoo has taken aim at Facebook, pitting a former internet titan against the social network behemoth over what has become the biggest open-fire range in the tech industry: patent infringement.
Yahoo’s lawsuit against Facebook alleges that the social media giant’s business infringes on 10 of Yahoo’s patents. The patents cover commonly used features of the social web: personalized advertising, customized portal pages and news feeds, recommendations to connect with other suggested users (and screen out spammers), social music and messaging applications, and authorizing some users (but not others) to see different sections of your content.The wide nature of these patents, and the limited way that Yahoo itself leveraged them, has tagged Yahoo with the least lovely handle in the tech world: “patent troll.” The word is commonly associated with companies like Nathan Myhrvold’s Intellectual Ventures that ship no products and live off royalties and settlements from IP. It’s not a happy place for a big (if dysfunctional) online media company to find itself. Even if it’s also doing anything and everything it can to pull together as much value for its shareholders, the blowback at Yahoo’s audacity could be tremendous. Especially if the lawsuit fails.
In its complaint, Yahoo says that Facebook’s use of these technologies has been essential to the market share Facebook now enjoys (at Yahoo’s expense, among others). It says Facebook has refused to license these patents and payment for royalties past due is insufficent compensation for their willful and repeated violation. Yahoo asks the court for triple damages, pre-judgment and post-judgment interest on those damages, all court costs, and — ka-boom — that Facebook be “immediately, preliminarily, and permanently enjoined from further infringement of the patents-in-suit.”
Which is to say, Facebook either shuts down or becomes the lamest (but most widely adopted!) address book manager ever.
Back in June 2010, Yahoo made friends with Facebook, deeply integrating Facebook’s social services with Yahoo.com. If it saw a problem with Yahoo’s services then, it kept its reservations to itself. Now thatScott Thompson is in charge, Yahoo has become much more aggressive toward Facebook — and (should its suit be successful) potentially many other companies as well.
Things like this don’t usually happen in Silicon Valley. “Yahoo! has broken ranks and crossed the unspoken line which is that web companies don’t sue each other over their bogus patent portfolios,”writes venture capitalist Fred Wilson. “I don’t think there’s a unique idea out there in the web space and hasn’t been for well over a decade. Pretty much everything useful is based on prior art going back before the commercial web existed.”
The exception to this rule, of course, is Yahoo. Yahoo sued its once-partner Google in 2004, shortly before it, too, was headed toward a lucrative IPO. Then, Google settled, for lucrative stock in the company. If Facebook comes to any similar agreement to make Yahoo go away, I doubt it will be nearly as generous.
The lawsuit knocks out the wobbliest of the three legs from the tentative Yahoo-Microsoft-Facebook alliance in common defense against Google. Microsoft provides the search engine, Yahoo the original and aggregated media, and Facebook the social network. That’s gone now.
Where does Yahoo go from here? Just a month ago, it seemed like it was going to build its way out of its problems, ramping up political coverage for the 2012 election and hiring star columnists like Virginia Heffernan.
“They are basically capturing jewels. They’re bringing people in who are stars, because one of the next big phases of the company is to become a really big media powerhouse,” a source told Politico’s Dylan Byers after the Heffernan hire in January. Wired
0 comments:
Post a Comment