Yahoo CEO Scott Thompson

Yahoo grabbed the attention of the tech industry today, but not with a new product announcement. The company filed a patent infringement lawsuit against Facebook, a bold move under the leadership of new CEO Scott Thompson.

In other words, one of Microsoft’s biggest partners just sued another of Microsoft’s biggest partners, a company in which Microsoft has a minority stake.

As noted by Matt Rosoff of Business Insider, Facebook has a mere 20 patents to its name, and the natural thing would be for the company to call up its minority shareholder, Microsoft, in search of a patent licensing agreement to use in its defense.

But Microsoft is counting on its partnership with Yahoo to give it the critical mass to compete against Google in the search market.

“Excuse, me, Mr. Myhrvold? Mark Zuckerberg on line two.”

At the very least, putting together the invite list for this year’s CEO Summit in Redmond just got a lot more challenging.

Yahoo’s suit takes aim at Facebook with 10 patents, in such areas as personalized ad targeting, music playback, content sharing and other aspects of the Facebook experience.

Kara Swisher of AllThingsD has a copy of the lawsuit, and details on the back-and-forth between the companies, including Yahoo’s quote of Facebook CEO Mark Zuckerberg: “Getting there first is not what it’s all about.”

PaidContent has a summary of the patents that Yahoo is using as the basis of the suit.

Comments

  • Guest

    Yahoo is like MS. Ineffective management. Ineffective strategies. A long list of patents but a short list of successes using those.

    • http://blog.findwell.com Kevin Lisota

      That is a stretch. There are fair criticism’s of MS management for missed opportunities and other flubs, but does Yahoo have great businesses like SQL, Exchange, Windows, Office, Xbox, etc?

      Yahoo seems to be fumbling their entire business all at once, while MS has failed in particular strategies/markets while succeeding in others. Stock price sentiment seems to bear this out. YHOO is down 50% from 5 yrs ago. MSFT is up ~15% from 5 years ago and is approaching its 10 yr high.

      • Guest

        I was referring to the current situation and indeed the overall record under Ballmer as CEO. Most of the “great businesses” you reference were established prior to that. Indeed, market share for many of them has actually declined under Ballmer, particular over the last five years. I’d also debate the inclusion of Xbox on this list. Even after a dozen years of effort and around $20 billion invested, it’s still unproftiable over its lifetime. And even the current annual profits represent very low margins, both generally and particular compared to MS’s historical software businesses (or most other company’s software businesses).

        I think Yahoo’s decline competitively, in relevance, and market cap, was years in the making. Everything does seem to be failing for them now, but I attribute that to the cumulative effects of years of individual failures and mismanagement. In other words, a tipping point has been reached overall. In that way, they’re just MS a few years further down the curve imo.

        Your stock analysis is heavily weighted by your choice of time period and Yahoo’s recent decline and MS’s recent rise (which is somewhat inexplicable given its earnings prospects and anemic growth). Had you done this analysis a year ago, Yahoo would have outperformed MS going all the way back to Ballmer’s appointment as CEO – and by quite a margin. Also, keep in mind that Yahoo hasn’t spent a fraction of what MS has spent on buybacks to achieve that result, and that neither company enjoys a good record in that regard, be it 5 or even 10 years.

    • http://blog.findwell.com Kevin Lisota

      That is a stretch. There are fair criticism’s of MS management for missed opportunities and other flubs, but does Yahoo have great businesses like SQL, Exchange, Windows, Office, Xbox, etc?

      Yahoo seems to be fumbling their entire business all at once, while MS has failed in particular strategies/markets while succeeding in others. Stock price sentiment seems to bear this out. YHOO is down 50% from 5 yrs ago. MSFT is up ~15% from 5 years ago and is approaching its 10 yr high.

  • Dinky

    Yahoo’s newest innovation is forcing you to remove unwanted incoming spambots from Messenger showing up on screen (flashing) while you’re singed into Mail, their biggest draw.
    I’d love to see the genius exec who signed off on that one get his public reward. Their news headlines are also getting ridiculously conservative, with idiots like Michelle Malkin on the front page. Real impressive.

    MSFT is a rotting log left in Spirit Lake that nobody cares about anymore.

    Facebook is an abominably invasive fad that millions of people are now running from
    to Linked In and other serious networking sites for adults, while the under 30s and teens
    abandon it in droves or just wait for whatever comes next to replace it.

    • Guest

      Thank you, Dinky. You’re the only sane one left.

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