Facebook accused by Yahoo
Yahoo has launched legal action against Facebook for the social media company's alleged infringement of 10 patents including privacy controls, advertising and networking.
Facebook has expressed its intention to fight the lawsuit and said in a statement that it regards Yahoo's actions as 'puzzling'.
In court papers filed yesterday (12 March 2012), Yahoo claimed that Facebook's strategic model, from user profiles to information sharing and messaging, is based on technology patented by Yahoo.
Facebook said: "We learned of Yahoo's decision simultaneously with the media.
"We're disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation."
Facebook IPO filed last month
In 2011, Yahoo lost its number one spot to Facebook in the US display advertising market, according to digital research and analysis publisher eMarketer. The company still has approximately 700 million website visitors each month, but this falls short of Facebook's 845 million active users.
Over 1000 patents are owned by Yahoo, which wants to strike a licensing deal with Facebook in an echo of its 2004 settlement with Google. The latter was reached just before the search giant went public, netting Yahoo hundreds of millions of dollars.
Facebook filed for an initial public offering (IPO) on the stock market in February 2012, which is expected to see it valued as high as $100bn (£638bn).
Tom Glass, creative director at theEword, said: "Facebook would undoubtedly prefer not to have issues such as this hanging over its head with an IPO looming - something of which Yahoo will be very aware. It may also appear to many people in the industry that Yahoo is keen to cash in at a lucrative time for Facebook."