Yahoo Sues Facebook; Facebook Puzzled

Yahoo, declining in influence and audience, has fired a broadside lawsuit against the about-to-IPO and fast-rising Facebook, according to All Things D.

Pointedly, the lawsuit states: "Facebook's entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo!'s patented social networking technology."

[CLICK HERE to read the full complaint.]

Yahoo is seeking that Facebook be enjoined from further infringements of their patents, along with damages, with pre- and post-judgment interest on the damages, and the coverage of all court costs.

Facebook provided The Next Web with a statement of its own:

We're disappointed that Yahoo's effort to engage with us was limited to a few short phone calls and that we continue to learn of new developments about a long-time partner through the press. We will defend ourselves vigorously against these puzzling actions.

The high-profile lawsuit will continue a troubling Silicon Valley trend of filing patent infringement lawsuits against competitors.

Yahoo alleges that Facebook has appropriated or infringed on 10 of Yahoo's patents. The patents that have allegedly been infringed cover subjects like social interaction, advertising functions, privacy expectations and users' customization of their experience. 

Yahoo!'s research and development has only grown since its inceptions. Since 1997, Yahoo! has filed thousands of applications for patents on innovative computing technologies that it has developed. Every year, Yahoo! spends hundreds of millions of dollars in research and development so that it can offer its users the most innovative products. From 2008 through 2010 alone, Yahoo! invested more than $3.3 billion in research and development.

Yahoo is already under pressure as new CEO Scott Thompson looks to streamline operations and, as rumored, make some hefty layoffs.

We will update this story as it develops.

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