Yahoo's Suit Against Facebook: A Quest for Self-Respect

It's a way of reminding employees -- and Silicon Valley -- that the company still comes up with actual tech innovations
Tony Avelar/Bloomberg

The reaction to Yahoo!’s patent-infringement lawsuit against Facebook has been predictable. Mostly it’s been along the lines of: Yahoo is a bumbling technology dinosaur trying to cash in on the hot, young thing. Or, as Kara Swisher at AllThingsD put it, Yahoo’s new motto is “If you can’t beat ’em—and it can’t—sue ’em.” Swisher went on to call Yahoo a 98-pound weakling, while her commenters called Yahoo a patent troll and its management unimaginative fat cats.

“The matter with Facebook remains unresolved and we are compelled to seek redress in federal court,” reads an e-mailed statement from Yahoo. A company spokesperson declined to comment further on Yahoo’s reasoning, but an argument can be made that “dinosaur” and “patent troll” are exactly the kind of language that spurred this lawsuit. In recent years, the company has lost tons of talent while coming to be viewed as a sort of engineering wasteland. To outside observers, Yahoo appears to have given up.

The situation has gotten so bad that Yahoo gets little or no credit, even when it does something legitimately cool. About six years ago, Yahoo began assembling a team of engineers to work on software known as Hadoop. That team beavered away to turn Hadoop into the most powerful data-analysis engine of its time. Yahoo gave away its contributions to Hadoop under an open-source license, and the technology has since been embraced by thousands of companies that use it to mine sales data, hunt for clues in the genome, and figure out what to display to users on the Web. Facebook, in fact, stands as one of the biggest Hadoop users on the planet.

People in the data-analysis world know about Yahoo’s work on Hadoop, but the company has not received many accolades from a wider audience. IBM, for example, used Hadoop to train its Watson supercomputer that earned fame by winning Jeopardy! Hadoop served as a key element in building Watson’s big brain, yet IBM did little to promote that fact. And so, as the world hailed IBM as the purveyor of grand technology, Yahoo’s engineers toiled away in obscurity, consigned to pat their own backs.

Mike Olson runs Cloudera, a company that develops Hadoop technology and helps companies use the software. In a blog post last year, he rightly pointed out that many companies, including Facebook, have gone on to contribute to Hadoop since Yahoo did the bulk of the initial work. Yet there’s little question that it took a company like Yahoo to focus the people and resources that turned a fledgling open-source project into a product worthy of widespread use. If you look at the ongoing contributions from Yahoo and its Hadoop spinoff, HortonWorks, you see that the company still dominates much of the work around the software.

My guess is that Yahoo’s new chief executive officer, Scott Thompson, looks at this patent lawsuit against Facebook through a couple of lenses. The first is a pure business case. Yahoo thinks it owns core technology around messaging, displaying ads, and fighting fraud and it wants to be paid for its inventions. What better time to put legal pressure on Facebook than when the company is heading toward an initial public offering and needs a clean bill of health?

The second lens, though, is more visceral. Thompson wants to send a message that Yahoo’s culture can change. This is a company that built interesting technology in the past and that continues to advance novel software. At some level, this lawsuit is a signal to employees that Yahoo should not just roll over and play dead but should feel it can take the likes of Facebook head-on.

Thompson’s predecessors did a woeful job of celebrating Yahoo’s engineering chops, turning Yahoo into a punchline. It’s an image that the company must shake if it wants to attract talent that can compete.

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