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Facebook, Yahoo settle suit, form ad alliance

Published: July 7, 2012 | 8:28 am
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-July 06, 2012-
SAN FRANCISCO — Facebook Inc. and Yahoo Inc. have settled a patent-infringement suit and formed a new partnership around online advertising and content, the two companies said Friday.

Shares of Facebook (US:FB) edged higher by a fraction in after-hours trading, after posting a 1% gain in the regular session on news that the social-networking company was also about to roll out a new mobile-adverting product.

Yahoo (US:YHOO) shares were also up a fraction late to $15.93, and Facebook up as well to $31.84.

The agreement puts an end to a legal battle that began when Yahoo accused Facebook of infringing on its patents and essentially building its business based on the Web portal’s technology. Facebook fired back with its own allegations of patent infringement against Yahoo.

The agreement includes a patent portfolio cross-license and plans to collaborate in content distribution and media-event coverage.

“I’m pleased that we were able to resolve this in a positive manner,” said Facebook Chief Operating Officer Sheryl Sandberg said in a statement. Yahoo’s interim chief, Ross Levinsohn, said that the agreement “provides branded advertisers with unmatched opportunity.”

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