Google and Yahoo Settle Overture Lawsuit

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."

Comments

Shares as cash?

[usefool]

Is it a common practice nowadays to use shares (IPO even) for payment?

My understanding is that if a share is not sold, you don't have a cent yet in your pocket.

The article estimated that would net Yahoo as much as an additional $149 million at the high end of Google's expected IPO price range. However, could (and would) Yahoo sell all shares at the high end price though?

Re:Shares as cash?

[Anonymous Coward]

It's very common. For example, in almost any story involving the purchase of a company for $XXX million (particularly ones from the ex-dot-com days) the deal is actually for stock, not cash. It's also common for companies to swap options or warrants as part of some deal.

Shares have value, even if a company isn't public. It's simply a little easier to place a value on a public company, since you have so many opinions floating around in the market.

LOL

[nlawalker]

Google Exec 1: "Yahoo is suing us for the way we display ads."
Exec 2: "Yeah, but look, this IPO thing is great! Look, it's so easy. I can just create a couple million shares here and and do whatever I..."
Exec 1: "Problem solved."

IP lawyers seems to be hard at work lately

[Louis Savain]

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?

Re:Seems like..

[nsample]

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.

Re:Odd behavior?

[Technically Inept]

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.