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With IPO looming, Yahoo lawsuit puts Facebook in awkward position

Sharon Gaudin | March 14, 2012
With an aggressive new CEO at Yahoo's helm and Facebook looking ahead to its initial public offering, Yahoo's patent lawsuit may have Facebook in an awkward position.

"Facebook and Yahoo have at least been friendly in past years, but with the fortunes of Yahoo heading in a drainward direction, is it any wonder that they're looking to maximize their value in any way possible?" asked Dan Olds, an analyst with The Gabriel Consulting Group. "The Yahoo of today isn't as strong as the Yahoo that held Google over the same barrel in 2004. But Yahoo does have a lot of technology patents, and it's hard to do anything in tech these days that isn't infringing on some obscure, or not so obscure, mechanism that someone has patented in the past."

It's also another aggressive move by Thompson, who took over Yahoo's top post in January. Since Thompson became CEO, the company's co-founder, Jerry Yang, its chairman Roy Bostock and three other directors have left the company.

About a week ago, reports began circulating that Yahoo executives are planning a major shakeup that could include thousands of layoffs. The changes could come as soon as this month.

"Thompson is willing to use every arrow in his quiver," said Enderle. "He is going to use an aggressive management style. He is far from done. He is one of the more aggressive CEOs we have seen to date to pull off either a turnaround or a sale. Yahoo desperately needs an aggressive CEO."

 

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