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Facebook & Yahoo settle patent dispute, seal new ad deal

Facebook and Yahoo have settled a patent dispute with a new ad partnership.

Under the deal, Facebook and Yahoo will cross-license the patents in question to each other. The companies will also team up for joint "premium media experiences" across both sites, which will include Yahoo event coverage on Facebook and an expansion of Facebook integration across Yahoo.

"We are excited to develop a deeper partnership with Facebook, and I'm grateful to Sheryl [Sandberg] 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," Ross Levinsohn, interim CEO of Yahoo, said in a statement. "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 Sandberg, Facebook's COO. "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."Yahoo and Facebook said they would work together on "multiple tent-pole and anchor events annually over the next several years." This, they said, will provide "world-class sponsorship opportunities" for advertisers, something on which Facebook has been focused since going public earlier this year.

According to sources familiar with the deal, no money changed hands.

The news comes several weeks after court filings said Yahoo and Facebook were engaged in settlement negotiations.

The case kicked off in March, when Yahoo filed suit against Facebook over patents related to its ad network, privacy, customisation, messaging, and social networking as a whole. Facebook filed a countersuit against Yahoo the next month for infringing on 10 Facebook-owned patents. In response, Yahoo argued that the social network's counterclaim was retaliatory and based on information to which Facebook couldn't possibly have access.

In May, Yahoo apparently made a bit of a legal blunder when it accused the social network of not providing the US Patent Office with a required sworn declaration related to two of Facebook's 10 patents. This, Yahoo argued, made those patents unenforceable, but it turns out that Facebook had indeed provided the declarations.

Yahoo and Facebook have worked together for a number of years. Back in December, Yahoo expanded its Facebook social sharing feature to 26 more Yahoo sites around the world, meaning there were more options to automatically share the Yahoo stories you're reading with Facebook friends.