The web portal claims Facebook has ignored its patents by using technology it created for online advertising, including tools that customise web pages and ads to specific users, methods to prevent click fraud and news feed generation.
Yahoo!’s lawsuit says: “Facebook’s entire social network model, which allows users to create profiles and connect with, among other things, persons and businesses, is based on Yahoo!’s patented social networking technology.”
The lawsuit comes ahead of Facebook’s planned stock flotation, which is expected to value the social network at about $100bn (£64bn).
The case is reminiscent of Yahoo!’s move to sue Google ahead of the search giant’s flotation in 2004, again for allegedly infringing the portal’s patents that relate to advertising. Google settled the case by issuing 2.7 million shares to Yahoo!.
Yahoo!’s revenues have flagged since their peaks in the mid 00s as user trends have shifted from portal websites to social networks.
The company recently appointed former PayPal president Scott Thompson as its CEO, replacing Carol Bartz who was ousted in September, to try to restore the “momentum” needed for the business to return to growth.
Yahoo!’s decision to sue Facebook could result in securing licensing fees or other assets should the court rule in its favour.
Facebook says in a statement that it will defend itself “vigorously” against Yahoo!’s “puzzling” actions.
The company adds: “We’re disappointed that Yahoo!, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation.”