Yahoo and Facebook have settled their patent row and formed an advertising alliance.
Yahoo had sued the social network in March claiming 10 of its intellectual properties had been infringed. Facebook subsequently bought 750 patents from IBM and counter-sued and followed up by buying Microsoft patents to further strengthen its defence.
However, following a deal made on Friday the two firms have agreed to put aside their lawsuits and work together on future advertising deals. In a blog post on Friday, Yahoo said that it had “entered into definitive agreements (with Facebook) that launch a new advertising partnership, extend and expand distribution arrangements, and settle all pending patent claims between the companies”.
The statement says that the companies intend to bring premium media experiences to customers as well an integrating Yahoo’s event coverage with Facebook. The post included quotes from Yahoo interim CEO Ross Levinson and Facebook COO Sheryl Sandberg thanking each other and welcoming the deal.
The speculation is that the deal will help Levinson secure the CEO role on a permanent basis. Yahoo CEO, Scott Thompson, who initiated the patent lawsuit in March, stepped down in disgrace in May over false statements on his CV, and Levinson has been working on this deal ever since.
Although no money appears to have exchanged hands, the row has still proven to be expensive with Facebook having to fork out millions for the patents it bought.