Yahoo alleges that Facebook infringes ten patents related to advertising, electronic messaging, social networking, privacy and Web site customization. The lawsuit says that “For much of the technology upon which Facebook is based, Yahoo! got there first. Facebook’s entire social network model, which allows users to create profiles and connect with, among other things, persons and businesses, is based upon Yahoo!’s patented social-networking technology.”
With its initial public offering coming up and an estimated value of up to $100 billion, Facebook may well settle instead of fight.
However, Facebook also owns several Friendster patents it bought in 2010 that may offer it some protection or fodder for a counter-suit, and Facebook also has the resources to search for prior art that would invalidate the Yahoo patents.
Facebook claims to have learned of Yahoo's decision to sue from media reports.