Yahoo, Facebook reportedly near patent peace deal

The two Internet giants are close to hammering out an accord that would not only end their patent bickering but also strengthen cross-licensing and cross-advertising deals.

The legal battle between Yahoo and Facebook is moving closer to a more amicable ending.

AllThingsD reported exclusively this morning that the two Silicon Valley giants are hammering out a peace deal that would possibly not only settle up any disputes over their respective patent infringement lawsuits, but also strengthen their partnership through cross-licensing on certain patents and cross-advertising deals.

Yahoo originally filed a lawsuit in March at the U.S. District Court in San Jose, arguing that "Facebook's entire social network model" was based on patented Yahoo technology. Facebook struck back with a countersuit in April over 10 more patents.

If this plan works out, then neither company will actually be settling financially -- no one would be paying up over patent infringement accusations.

The deal is expected to be officially announced later today.

The potential truce comes on the heels of the news that Yahoo is also a few steps closer to replacing its former CEO, Scott Thompson, whose 4-month tenure at the beleaguered search giant came to an abrupt end after it was revealed he fibbed on his resume.

Yahoo's move to sue Facebook last spring was eventually pinned on Thompson too as many Valley insiders saw this as a poor and weak strategic move considering Yahoo already had enough problems to deal with in the wake of shaky earnings and Carol Bartz's forced departure last year.

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