Confirmed: Yahoo, Facebook Settle Patent Dispute, Announce Ad & Distribution Partnership

AllThingsD is reporting Yahoo has reached a deal with Facebook to drop the patent infringement lawsuit in exchange for expanding their ad and content deal.

Kara Swisher, who typically has the inside word on these topics, said the deal was approved this morning by Yahoo’s directors on a telephone meeting. Kara said Yahoo and Facebook will formally announce it “sometime later today.” There wil be no cash payments involved in this deal.

The specifics of the deal are not clear right now but the main point is Yahoo will drop their patent suit and they will expand their ongoing partnership. This should include “a joint advertising sales effort, as well as cross-licensing of some key patents between the pair,” said Kara.

In addition, Facebook may pay a license fee to Yahoo for some of their other patents.

We will update this story as soon as we hear anything on record.

PostScript: Yahoo has confirmed the rumors and announced they have “settle all pending patent claims between the companies.” They have also added some details to the new partnership:

Under the agreements, which include a patent portfolio cross-license, the parties will work together to bring consumers and advertisers premium media experiences promoted and distributed across both Yahoo! and Facebook. Yahoo! and Facebook will also work together to bring Yahoo!’s large media event coverage to Facebook users by collaborating on social integrations on the Yahoo! site.

“We are excited to develop a deeper partnership with Facebook, and I’m grateful to Sheryl and her team for working hard together with our team to develop this dynamic agreement. We are looking forward to building on the success we have already seen to provide innovative new products and experiences for both consumers and sponsors,” said Ross Levinsohn, interim CEO of Yahoo!. “Combining the premium content and reach of Yahoo! as the world’s leading digital media company with Facebook provides branded advertisers with unmatched opportunity.”

“I’m pleased that we were able to resolve this in a positive manner and look forward to partnering closely with Ross and the leadership at Yahoo!,” said Sheryl Sandberg, Chief Operating Officer at Facebook. “Yahoo!’s new leaders are driven by a renewed focus on innovation and providing great products to users. Together, we can provide users with engaging social experiences while creating value for marketers.”

Related Topics: Channel: Industry | Facebook: Business Issues | Legal: Patents | Top News | Yahoo: Business Issues

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About The Author: is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here.

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  • http://twitter.com/seopeace SEO Peace

    Nice to know that Yahoo drop its patent suit against Facebook and resolve all with peace and in a nice manner which will be beneficial for both. It is a nice deal that now Facebook and Yahoo will exchange Ads.

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