Yahoo are taking legal action against Facebook, ahead of the social network’s planned flotation on the stock market later this year.
The accusations are that Facebook has infringed upon 10 of Yahoo’s patents including systems and methods for advertising on the web. This form of patent litigation has been quite common between manufacturers of smartphones, however this is a new realm in terms of battles between the tech giants.
In their suit, Yahoo state that their patents “relate to cutting edge innovations in online products, including in messaging, news feed generation, social commenting, advertising display, preventing click fraud and privacy controls.”
It continues: “Facebook’s entire social network model, which allows users to create profiles and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology.”
Facebook has responded by saying it is disappointed that “Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation.”
This case of Yahoo suing Facebook is not the first time that such actions have been taken. Ahead of Google’s floatation in 2004, Yahoo sued the search company in a dispute that centred over patents that Yahoo had acquired the previous year when it took over Overture. In the end Google settled by issuing 2.7 million shares to its competitor.
But do they have a case? Colin Gillis, an analyst at brokerage BGC Partners, told the BBC “It’s reasonable that Yahoo would want to try this tactic again as it worked in the past.” He also said there is an air of desperation about the law suit, hinting that Yahoo’s new chief executive, Scott Johnson, might be trying to squeeze from Facebook after Yahoo have experienced consecutive quarters of revenue declines.