As it plans for an initial public offering, Facebook is growing concerned that a patent dispute with Yahoo (NASDAQ:YHOO) could have a material impact on its business.
On March 12, Yahoo sued Facebook for having allegedly infringed patents related to advertising, social networking, privacy, customization, and messaging, Facebook said today in a filing, adding that the company had yet to issue a response to the lawsuit.
“This litigation is still in its early stages,” Facebook said in the filing. “If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition or results of operations.”
Facebook has been slapped with more lawsuits over intellectual property in recent months as it prepares for one of the most hotly anticipated tech IPOs since Google (NASDAQ:GOOG). At the end of last year, the company held just 60 U.S. patents, but has begun to bolster its portfolio as a means of defense. Earlier this month, Facebook reportedly acquired 750 patents from IBM (NYSE:IBM).
Yahoo is demanding that Facebook license its technology, and is asking for an order barring Facebook from infringing 10 patents, as well as triple damages. Facebook said it plans to defend itself against “these puzzling actions.”
Facebook plans to raise $5 billion in its IPO this year, making it the biggest Internet offering on record. Analysts estimate the company’s valuation at up to $100 billion. Facebook has more than 850 million users around the world, and has been benefiting recently from users spending more time on the site. The total minutes per day all users spent on the site increased 57 percent in January from the year earlier. The average amount of time each user spent on the site increased 14 percent.
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