Should Microsoft save Facebook from Yahoo?

Some think Facebook needs to just buy Yahoo. Others think Microsoft needs to step in and save Facebook from Yahoo. Both seem unlikely scenarios, but Facebook needs to consider its options.
Written by Emil Protalinski, Contributor

Yahoo yesterday sued Facebook for allegedly infringing on 10 of its patents, with the hopes of securing some portion of the social networking giant's revenues moving forward. The lawsuit didn't come completely out of the blue, since last month Yahoo threatened Facebook with patent war and then a rumor suggested the talks had fallen apart, but it still came as a bit of a shock.

Yahoo has thousands of patents while Facebook has 62, according to the United States Patent and Trademark Office (USPTO). Some have said Facebook should just buy Yahoo. Others think Microsoft needs to come to Facebook's rescue.

Typically in situations like this one, the company being sued looks through its own patent portfolio, files a counter lawsuit, and negotiates to pay (or receive) some money, and the two agree to settle. The problem is Facebook has very few patents. As such, it will be very hard for Facebook to settle with Yahoo.

Enter Microsoft, which has 19,800 patents according to the USPTO. Business Insider points out that while Redmond has partnerships with both Facebook and Yahoo, "nothing is preventing Microsoft from selling or donating some non-search-related patents to Facebook, then stepping back and watching the fireworks."

In October 2007, Microsoft bought a 1.6 percent stake in Facebook for about $240 million, giving Facebook a valuation of $15 billion. Ever since then, the two companies have been best friends and have worked together on many different products, although now it's just mainly Bing (see links below). Microsoft even provided display ads for Facebook at one point, but that deal has since expired and Facebook now competes with Microsoft in the online advertising market.

Microsoft and Yahoo have a patent sharing deal through their 2009 search agreement, which has been extended till 2013. There may not be anything legally stopping Microsoft from helping Facebook, but the software giant's partnership with Yahoo is no joke. Microsoft cares about growing Bing, and it needs Yahoo to fight Google.

Of course it needs Facebook to fight Google as well, but somehow I don't think Microsoft wants to jeopardize either of its partnerships. Maybe Redmond will advise Menlo Park and Sunnyvale on what to do, but I don't think it will take action. Microsoft will probably just sit back and hope they'll work it out.

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