Facebook vs. Yahoo in Patent Suit

Mar 13, 2012

imagesCAW5NY5LIt’s the most anticipated stock market debut of 2012 – Facebook’s upcoming IPO is estimated to create over 1,000 millionaires among company employees alone.  Now the world’s largest social network, Facebook has grown from 700 employees in 2008 to roughly 3,000 today.  The company is estimated to have 2.5 million shares outstanding.  At $40 per share, Facebook’s expected value is $100 billion.


Just ahead of the expected flotation, however, Yahoo recently sued the social network company for infringing on over ten of its patents.  The patents in dispute include methods for web advertising, news feed generation, privacy controls, and more.  Facebook not only denies the claims, but is disappointed that such a longtime business partner would resort to involving the courts.    


This behavior isn’t unusual, however, for Yahoo.  Before Google’s flotation in 2004, Yahoo filed a similar suit over patents that ultimately cost Google 2.7 million shares in settlement.  It makes sense that with that previous success Yahoo would try the same tactic again.    


Professionals are skeptical, though, that Yahoo will walk away with easy money.  The company’s recent loss of co-founder, Jerry Yang, the firm’s chairman and three other board members all at once seems to have left Yahoo desperate.  In need of fresh funding due to recent revenue declines, this may be a last ditch effort to avoid job cuts.


Employees at Facebook, however, seem unworried by the allegations.  In fact, many expected to reach millionaire status are already planning what to do with the money.  One employee, expected to have shares estimated at $50 million is looking into booking a trip to space.  And why not, when a $200,000 or more trip to tour the galaxy wouldn’t even make a dent in his wallet.     





SEARCH BLOG


Latest Posts

Posts By Category


RECEIVE A SYNOPSIS OF OUR STAFF BIOGRAPHIES




DOWNLOAD WHITEPAPERS