From my Forbes.com blog The New Persuaders:
Ending one of the more bizarre spats in Silicon Valley lately, Yahoo and Facebook have settled their patent dispute. Yahoo had sued Facebook back in March, alleging the social network infringed on 10 Yahoo patents concerning advertising and social networking itself.
The suit had turned much of Silicon Valley against Yahoo, since the suit seemed so clearly timed to force soon-to-go-public Facebook into coughing up a big cash or stock settlement. But the move backfired, as Facebook then not only spent big bucks to buy its own patent trove, it countersued Yahoo. Not long afterward, Yahoo’s then-CEO Scott Thompson, whom some has said was a driver of the suit, left under a cloud thanks to apparent doctoring of his resume. In early June, negotiations began between the two companies to end the fight.
How dumb an idea was Yahoo’s decision to sue one of the most powerful and influential companies in technology today, one that had been a partner up to then? So dumb that the settlement doesn’t include monetary considerations to Yahoo at all, beyond a vague promise to work together more closely in the future….