As facebook IPO looms, Yahoo picks patent fight

Posted by Emma Woollacott

Yahoo's reportedly threatening to take legal action unless Facebook starts paying patent licensing fees for several different technologies.

According to the New York Times, the patents - up to 20 of them - cover aspects of advertising, privacy controls, news feeds and messaging, and have already been licensed by other companies.

"We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights," it says.

While patent litigation has turned into a feeding frenzy in the mobile arena, this would mark the first big battle in the social networking world - especially following, as it does, a long cooperation between the two companies.

But while the lawsuit is being pitched as an initiative by new chief executive Scott Thompson, it's probably no coincidence that it comes just as Facebook gears up for an IPO later this spring.

Yahoo launched a similar patent suit against Google back in 2004, just as Google was preparing for its own IPO, and netted itself $230 million worth of shares as a result.

Yahoo could certainly do with a similar windfall right now. Last November, ComScore reported that its share of the search market had slipped to just 15.2 percent, compared with Google's 65.3 percent.

And it's reported to be looking for a buyer; anyone fancying a bit of a gamble might find it a bit more of an attractive prospect now.