Yahoo is making fairly standard claims in Web tech circles: that a hotter, younger company is infringing on patents Yahoo registered years ago and now needs to cut the former Web behemoth in on some of the action. But how Yahoo is going about its fight reads more like the script from a political thriller, complete with reportedly dropping a dime to the New York Times.
"Yahoo contacted us the same time they called The New York Times and so we haven't had the opportunity to fully evaluate their claims," Barry Schnitt, a spokesman for Facebook, said in a statement to the newspaper in other media outlets. Publicly, neither company is commenting on the patent dispute but the Times, which appears to have inside access to the story, quoted unnamed sources as saying the two companies met Monday.
We can understand why Facebook is claiming that Yahoo tipped off the Times: the timing does seem orchestrated. Recall that late last year Yahoo started issuing press releases and making public statements about the value of its patent portfolio, which numbers in the thousands. That was presumably part of its strategic review and came at a time when Yahoo was rumored to be looking to divest a chunk of itself to investors.
But it also may have been part of an effort to set the stage for the attack on Facebook. Legalities aside, the timing of Yahoo's play comes as Facebook waits out a quiet period ahead of its initial public offering. Does the company rattle investors by picking a costly fight with Yahoo over the disputed patents, or does it quietly settle the issue, which reportedly focus on 10 to 20 patents dealing with advertising, Website personalization, social networking and messaging
"Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property," a Yahoo spokesman said in an e-mailed statement, the company's only public comment on the spat. "We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights."
The Times won't speculate on how much Yahoo is seeking, but its post on the Bits blog did point out recent Silicon Valley licensing deals, and noted this may be the first big test of intellectual property patents in the social networking space.