Boohoo for Yahoo
Yahoo is taking on Facebook — but it’s not vying for the hearts and minds of the Internet cool kids. It’s for licensing fees over some patents. This is not how it was supposed to be.
No, I’m not naive. But I am a bit of a romantic. Thing is, I remember when Yahoo was an upstart with two crazy awkward college kids who came up with something that the search giants of the time — Lycos and Alta Vista — could not withstand. Yahoo’s scrappiness was part of a long tradition of Silicon Valley startups that came before (and would come after). Like Bill Hewlett and Dave Packard, the elder statesmen of Silicon Valley who began their iconic company in a now iconic garage, Jerry Yang and David Filo started with nothing but an idea in a dorm room and changed everything. Yahoo’s blazing success in search and (the now-quaint notion of) cataloging the Web begs comparison to two other crazy awkward college kids who started a search engine. That search engine, of course, killed Yahoo. It had an equally kooky name — Google.
Now Yahoo, as part of its effort remake itself after a decade of decline, is said to be wielding a new weapon: a patent trove. The stellar DealBook blog of the New York Times, which first reported this story, couldn’t get anyone to disclose the particulars, but it quotes “people briefed on the matter” as saying Yahoo is threatening lawsuits and is in the midst of negotiations with a pretty big fish. “Yahoo is seeking to force Facebook into licensing 10 to 20 patents over technologies that include advertising, the personalization of Web sites, social networking and messaging,” DealBook reports.
Oh, how the mighty have… matured, to be charitable. Yahoo was crazy disruptive before “disruptive” was even digerati shorthand for “cool.” It was so popular that Reuters — yes, this Reuters — took a sizable stake in the young company. The American executive who made this happen, Andy Nibley, delighted in telling the story of how the very British Reuters board received the news he was investing millions in a company named “Yahoo!”
For years the two companies closely partnered to create wicked revolutionary news services. I know this because I was the lead guy on the Reuters editorial side in those heady days, collaborating with some daring executives and talented engineers at Yahoo’s Mountain View mecca.
Hey, we all grow up. We get married, get car loans, take on a mortgage. We become, as my closest comrade from those days (still a dear friend) never tires of reminding me, “not the demographic they care about.”
But that doesn’t mean we still can’t be cool — disruptive.
Yahoo’s been through the wringer. It’s sad enough that the worst decision it has made in the past few years has been not to sell out to Microsoft, and that one of those crazy awkward kids, Jerry Yang, has completely severed his ties to the company he founded.
Who knows — Facebook may be getting away with murder.
But patent enforcement is becoming the subtext of Web 3.0, threatening to make the Internet the province and playground not of awkward dreamers but of lawyers and accountants. Look at what’s happening: Google buys Motorola Mobility, sure, to extend its brand and reach into the mobile payments arena but also as a defensive move to acquire a basket of patents. Same with Nortel, divvied up by Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony. Kodak, a brand that people of a certain generation identify with the perfect slideshow, goes Chapter 11 long after it ceased to be relevant because it could not generate enough income from its patent portfolio to stay afloat.
And then there is Paul Allen: the co-founder of Microsoft, one of the world’s wealthiest self-made people, legendary risk-taking investor, a person who could easy wear “cool.” What’s he been up to? Patent trolling. As as Wired‘s Ryan Singel reported it, Allen is suing the “entire web — except Microsoft.”
Again, I am not naive. I know the Lords of Usenet fruitlessly (and laughably) tried to quash the commercialization of that pre-Web, text-only communications network. I know today’s awkward dreamers only make it to the cover of Wired when moneyed risk-takers back them, and they succeed.
So Yahoo is in good, or bad company, as the case may be. The company is not on life support like Kodak, but it has lost its way. It traded a founder in over his head for a hothead it fired and now have a back-to-basics guy, Scott Thompson, occupying the CEO’s office.
It certainly doesn’t want to make you scream: “Yahoo!”