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Google and Yahoo Settle Overture Lawsuit

Posted by simoniker on from the happy-again dept.

An anonymous reader writes "Google and Yahoo have apparently settled their ongoing lawsuit involving patented on-line ad technology owned by Yahoo subsidiary Overture. (U.S. Patent 6,269,361). According to reports, Google will issue 2.7 million common shares to Yahoo in return for a license. Read more about the infringement suit here. This move is expected to lower any potential downsides to Google's upcoming IPO."

10 of 106 comments (clear)

  1. do only evil by danmart · · Score: 2, Insightful

    lets see:
    infringe on gooogles.com trademark
    infringe on froogles.com trademark
    infringe on gmail trademark
    infringe on overture patent
    track all searches via cookies and IP address
    make stored information available to govt agencies

  2. Seems like.. by ciroknight · · Score: 3, Insightful

    Google's just trying to get their stock out there and in the news, any way possible. Kind of strange way of doing it since they could have won the lawsuit I'm sure, but still. This is very odd behavior from Google.

    --
    "Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." G.W.Bush
    1. Re:Seems like.. by nsample · · Score: 5, Insightful

      They would ahve most likely:

      A) Lost the lawsuit, and/or
      B) muddied the IPO waters by fighting at this time.

      This was a strategic move by Google.

  3. It's still a good deal... by sunilonline · · Score: 3, Insightful

    Even if Google stock falls to $1 a share (very unlikely), Yahoo would still make $2.7 million. It's not like the license costs Yahoo anything; they'll make plenty of money in any case.

    1. Re:It's still a good deal... by Anonymous Coward · · Score: 1, Insightful

      And the catch is... It's now in Yahoo's best interest to not sue Google anymore. If they do, they'll just bring Google's stock price down and therefore reduce their own assets.

  4. 2.7M *more* shares issued? by Anonymous Coward · · Score: 2, Insightful

    ... And with Google already acting like a penny stock, this is why I have no interest in the IPO.

  5. IP lawyers seems to be hard at work lately by Louis+Savain · · Score: 5, Insightful

    I predict that it will come a time soon when nobody will know who owns any particular piece of IP due to complete confusion. This whole IP business is getting ridiculous. IP laws seemed to have been created for lawyers to make a living while contributing nothing to the economy.

    The internet is a system that serves, among other things, as a conduit for exchanging ideas. Someone said that the internet never forgets. It is possible that most the newer patents involving software and the web are invalid due to prior art which can be found by searching the net. Someone else may have thought about it and posted it somewhere.

    Is there a special place on the net where people can go and post ideas so as to make it impossible for the greedy bastards to patent them?

    1. Re:IP lawyers seems to be hard at work lately by jesterzog · · Score: 4, Insightful

      If you invented something completely new and revolutionary, such as Bell's telephone, or the Wright brothers' plane, would you want to earn money from it for some time- or let anyone and everyone produce it and make the money (instead of you).

      It's interesting that you should bring this up, because so many inventions are as much a product of their time as of a particular inventor. I'd contend that the aeroplane wasn't a particularly unique invention, although it was probably hard to tell at the time due to communication issues. The telephone and the electric light bulb most likely weren't, either. If they hadn't been invented then someone else likely would have invented them within a short span of time.

      The Wright Brothers most likely invented their own powered flying device without help, and clearly got the most recognition for it. But there were several other people elsewhere doing exactly the same thing independently. eg. Richard Pearse is one example who arguably flew before the Wright Brothers. There are several others in different parts of the world.

      The point isn't so much that someone did it first, but that several people were able to independently do it at the same time. Why should only one inventor or otherwise capable person be able to profit just because they were the first to independently extend what was already known?

      Unfortunately I think that's what's happening quite frequently in today's world. It's particularly an issue now that improved communication can mean several people independently invent almost the same thing weeks apart, simply as an extention of existing knowledge and a reaction to something they needed or wanted more than any revolutionary business goal. Yet if the first person happened to file a patent on it, it's too bad for everyone else. They're not allowed to earn without paying up.

  6. Odd behavior? by FreeLinux · · Score: 3, Insightful

    Why is this odd? It is an excellent business strategy.

    First: When you are about to execute an IPO it is usually undesireable to have lawsuits hanging over your business. This is especially true when the suit is over a patent on your primary source of revenue.

    Second: Settling lawsuits is common business practice even with suites that you would likely win. The cost of going to court and defending against the suit, not to mention possible damage to your company's image, is usually higher than the settlement's cost. Therefore, the settlement is viewed as a reduction in operating cost.

    Finally: This particular settlement costs Google $0.00. They are literally manufacturing the "money" for this settlement. They are paying in stock. Stock that does not yet have a market value. And, any perceived loss on the potential sale of the stock is made up for by adding more stock to the IPO. It works GREAT for Google, from a business perspective.

    1. Re:Odd behavior? by Technically+Inept · · Score: 5, Insightful

      Finally: This particular settlement costs Google $0.00. They are literally manufacturing the "money" for this settlement. They are paying in stock. Stock that does not yet have a market value. And, any perceived loss on the potential sale of the stock is made up for by adding more stock to the IPO. It works GREAT for Google, from a business perspective.

      That's not really the way it works. You can't issue stock for free. Stock is just a percentage of your company. With more outstanding stock, those IPO shares would be worth, say, .00009% of the company instead of .0001% of the company (numbers entirely made up). Therefore, the IPO shares are worth slightly less, and Google makes less money on the IPO. And if the market is working efficiently (and it usually is), the money lost, between Google's cash payday and the value of the unsold privately held shares, will equal more or less what those new shares would have been worth in the IPO.

      That being said, if you think your shares are going to be overvalued at IPO, then this strategy it works great in the long run. It's the only way a company like AOL could buy a company like Time Warner.

      --
      Now watch me hit this drive.