Social networking giant Facebook Inc. (NASDAQ: FB) settled a patent infringement suit with Yahoo! Inc. (NASDAQ: YHOO). The two companies also said that they have entered into definitive agreements to launch a new advertising partnership, and extend and expand distribution agreements.
The lawsuit was filed by Yahoo, alleging Facebook of infringing on its patents and building its business on the web portalâ€™s technology. Facebook had fired back by accusing that Yahoo infringed some of its patents.
Under the terms of the agreements, Facebook and Yahoo will work together to bring consumers and advertisers premium media experiences promoted and distributed across both Yahoo and Facebook. The two companies will also work together to bring Yahooâ€™s large media event coverage to Facebook users by partnering on social integrations on the Yahoo site.
Sheryl Sandberg, COO of Facebook, said that she is pleased that FB was able to resolve the dispute in a positive manner and looks forward to partnering closely with the leadership at Yahoo. Sandberg further said that Yahooâ€™s new leaders are driven by a renewed focus on innovation and providing great products to users, and together, the two companies can provide users with engaging social experiences while creating value for marketers.
Yahooâ€™s interim CEO of Ross Levinsohn said that YHOO is excited to develop a deeper partnership with Facebook.
Facebook shares rose marginally in trading on Friday. The stock ended the day 0.83% higher at $31.73 on volume of 10.95 million. It touched an intra-day high of $31.90. FB shares are still trading well below their IPO price of $38.
Yahoo shares, meanwhile, fell on Friday. The stock ended 0.44% lower at $15.78 on volume of 12.15 million. Year-to-date, YHOO shares fell 2.17%, underperforming the NASDAQ, which gained 12.75% in the same period.