Facebook and Yahoo are calling off their heated patent lawsuit battle, and in fact have just signed a deal to cross-license their entire patent portfolios to each other without money changing hands, sources directly familiar with the deal tell me. The deal will likely be formally announced later today. Sources also confirmed that the two web giants are entering into an ad sales partnership, as first reported by Kara Swisher of AllThingsD this morning.
However, Swisher noted the companies would only cross-license “some key patents”, and Facebook might have to pay to license others from Yahoo. The patent deal is actually much larger. It encompasses their entire intellectual property stockpile such that they won’t have to pay be able to use each other’s patents, and won’t be able to sue each other over them either. Investors in both companies should rest easy.
Details on the advertising sales partnership are still scarce but sources said it will likely center around the two companies working together to secure big ad buys and spread placements across their properties. This way, if say Ford was having a massive launch for a new car, Facebook and Yahoo could help the auto-maker distribute ads across Facebook.com, Facebook’s mobile site, and all of Yahoo’s news sites, portals, and utilities for maximum impact.
We’ll have more details shortly.