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Aidan Hiljeh

Why Yahoo! Is Suing Facebook

May 01 2012, 02:10 PM by

Facebook has made quite a few enemies over its eight year history. Some are serious threats to its dominance. Others are viewed as mere blips on the radar. Facebook may not have been paying Yahoo! much attention lately, but now it has no choice but to devote its full attention.

In February, Yahoo! gave Facebook a stern warning: Pay the licensing fees to use the technology you stole, or we’ll sue. Apparently the social networking giant did not heed the warning because bam! now we have a lawsuit on our hands.

Yahoo! recently filed a lawsuit in a San Jose Federal District Court, where it is contending that Facebook knowingly infringed on 10 of its patents. According to the suit, the company is seeking an undisclosed amount in monetary damages for the defendant’s usage of web technologies in areas ranging from social networking and instant messaging to advertising and privacy. Yahoo! claims that it was issued these patents from 1999 to 2010 and of course says it has the paperwork to back it up.
Giant in Distress
It is no secret, in the internet world at least, that web giant Yahoo! has fallen on some very hard times. In early April, the company announced that it would be laying off approximately 2,000 employees in a move it says will save roughly $375 million a year. Scott Thompson, the recently anointed CEO, is on a mission to eliminate positions that do not fall in line with his vision of what the ailing internet pioneer needs to do to turn things around.

But downsizing will only solve a portion of the problems Yahoo! is currently facing. Not only is the company having a difficult time generating advertising revenue but also failing to maintain relevance amid the presence of rivals like its search partner Microsoft, Google and even Facebook. The two internet powerhouses have been teaming up on various initiatives over the years, but it is probably safe to say that we have seen the end of those partnerships in light of the current legal dilemma.
Always a Battle Brewing
Patent battles between tech companies have become as common as the battles between cowboys and Indians depicted in old American West tales. Motorola always seems to find itself caught in the middle of a patent-related dispute. The mobile phone giant is not only suing Microsoft for use of its H.264 video compression technology, it is also going after Apple for allegedly infringing on four of its patents; though, due to a recent court ruling, it will only be able to sue the company for one. The legal spat between Yahoo! and Facebook marks the first major patent feud in the social media space, but it probably will not be the last.

Yahoo! is no stranger to lawyering up in attempt to neutralize its enemies. Back in 2004, it went after Google for patent infringement and other legal claims. Google ended up settling out of court and handing over a generous amount of shares from its IPO. This is also not the first time Facebook has found itself at the center of a court battle. The Winklevoss brothers, Cameron and Tyler, claimed that fellow Harvard University student Mark Zuckerberg stole their idea and used it to create what is now the world’s top social network. Facebook was able to win this battle, but may not be so lucky when it comes to Yahoo!’s pursuit.

The battle lines have been drawn and both sides are standing firm. Yahoo! is not withdrawing its claims and Facebook is not giving in without a fight. Get your popcorn, folks. This one is about to get very interesting.

Posted in Social Media, Current Events

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