Microsoft Chooses Facebook Over Yahoo In Patent Spat

Microsoft has chosen to side with Facebook in its ongoing patents lawsuit against Yahoo, a new development in the tech industry indicates.

Remember back in March when we reported here that Microsoft has been put in an awkward position as Yahoo, armed with its patent portfolio, sued Facebook? I guess Microsoft is not in that awkward position anymore. Or at least the awkwardness has been reduced as it has seemingly chosen to side with Facebook against Yahoo.

According to a report from Reuters, Microsoft has agreed to sell to Facebook patents it got from AOL. The deal is reported to be worth $550 million which is a lot of cash and indicates the importance of the patents the software giant sold.

Reuters says that the deal comprises of 650 patents and patents applications and also includes license to 275 other patents and patents applications held by Microsoft.

Microsoft bought the patent collection from AOL earlier this April. Some of the technology bought by Microsoft involves those developed by Netscape. The Microsoft purchase was eclipsed, however, by Facebook’s $1 billion purchase of the photo-sharing application Instagram. Nonetheless, Microsoft’s purchase of the patents from AOL was equally big as it was also worth north of $1 billion.

Microsoft said that the selling of the patents to Facebook is to “recoup over half” of the costs of  buying the trove from AOL. Interestingly, Facebook is also said to have participated in the auction by AOL, along with tech giants like Amazon and eBay.

Anyway, this means that Microsoft has given Facebook a very potent selection of weapons it can use against Yahoo in their ongoing patent conflict. Facebook is growing more and more robust in terms of its patent portfolio as it has also bought 750 patents from IBM last month.

So, does this mark the beginning of the end of the relationship between Microsoft and Yahoo? Don’t forget that all Yahoo searches are now being served through Microsoft’s Bing search engine. It does appear like the beginning of the souring of Microsoft’s relationship with Yahoo.

You can’t blame them, however, as Microsoft may want to totally crush Yahoo, dealing a death blow while the company is currently struggling. That may sound harsh but that’s business for you.

However, I don’t particularly feel comfortable with Facebook gaining this much clout in the tech industry. It’s a already a giant but do we actually want it to get much stronger, particularly while it still is getting more and more dominant as more and more users become engrossed in it?

Nonetheless, there’s also the side that Yahoo, which was criticized for acting like a patent troll by suing Facebook, will be vindicated if it won over Facebook in this patents suit. Maybe setting this kind of precedent is what Microsoft doesn’t want.

What do you think? Tell us in the comments below.

Images 1, 2 & 3 from TonZ, pshab & codepo8 on Flickr (CC)

[cb]Microsoft[/cb]

[cb]Facebook[/cb]

[cb]Yahoo[/cb]