Why Facebook-Microsoft Patent News Isn't a 'Disaster' for Yahoo!
NEW YORK (TheStreet) -- Earlier Monday, Microsoft(MSFT) announced that it would basically split the patents it had recently bought from AOL(AOL) with Facebook. Facebook will pay roughly half the costs to get their hands on them.
Immediately, the pundit-sphere started cackling that Yahoo!(YHOO) was about to have its head handed to it by Facebook because of this news.
Business Insider squealed that this news was a "disaster" for Yahoo! and Scott Thompson's plan to sue the social networking giant.
Yet a funny thing happened in the minute-to-minute trading of Yahoo! stock immediately after the Facebook-Microsoft news was released: it went up. It didn't go up by a lot and the stock was already down more than 1.5% on a bad tape, but the stock still went up.
What does the accord between Facebook and Microsoft mean for Yahoo!? The honest answer is no one knows and it could mean nothing.
Even if Yahoo! hadn't sued Facebook over the patents, the reality is that Facebook was woefully low on filed and granted patents. It was actually pretty reckless that it had so few patents. And being founded in 2004 is no excuse. Any start-up needs to be thinking of building its IP portfolio from day one.
All the Yahoo! suit did was wake Facebook up from its Gen Y "I'll live forever and never get sick so I don't need life or health insurance" mentality. Now, weeks away from its IPO, Facebook has got IPO religion. First, it bought a slug of IBM's patents (at an undisclosed price) and now $650 million for its share of the AOL patents.
All of these moves could have nothing to do with the current Yahoo! suit. It's especially hard for outsiders to know as lay patent people and not knowing specifically what they bought and how those patents relate to Yahoo!'s current claims.
I say "current claims" deliberately because I'm sure that Facebook and Yahoo! are also talking about potential future claims Yahoo! could bring against Facebook.