Yahoo, Facebook Strike Patent Truce, Ad Alliance

SAN FRANCISCO -- Facebook and Yahoo have agreed to settle a months-long patent dispute, averting a potentially expensive battle over the technology running two of the Internet's most popular destinations.

In dropping the lawsuits, the companies agreed to license their patents to each other and form an advertising and content-sharing alliance that expands their existing partnership. Friday's settlement involves no exchange of money.

Now that the antagonism is dissolving into an accord that could benefit both companies, the hundreds of millions of Web surfers who use both Yahoo and Facebook should find even more common ground on the two services..

The advertising alliance could help Yahoo recover some of the revenue that it has been losing as marketers shift more of their spending to a larger and more engaged audience on Facebook's online social network. Facebook, in turn, gains the opportunity to show the ads tailored to fit the individual interests of its 900 million users in other heavily trafficked areas besides its own website.

The truce ends a conflict provoked by Yahoo's short-lived CEO, Scott Thompson, who was dumped from the job two months ago after misinformation on his official biography raised questions about his integrity.

Under Thompson, Yahoo filed the patent lawsuit in March, wielding it as a weapon against a company that Thompson believed had been prospering from the ideas of its older rival. The complaint alleged that Facebook infringed on 10 Yahoo patents covering Internet advertising, privacy controls and social networks. Yahoo Inc. later added two more patents to the lawsuit.

But Thompson's attack on Facebook Inc. quickly turned into a public-relations disaster. Much of the technology industry railed against Yahoo's tactics. Critics viewed the lawsuit as a financial shakedown by a desperate company whose well of innovation had run dry.

New York venture capitalist Fred Wilson summed up the enmity toward Yahoo in an acerbic blog post that ended with this denouement: "I am writing this in outrage at Yahoo. I used to care about that company for some reason. No more. They are dead to me. Dead and gone. I hate them now."

When Yahoo replaced Thompson in May with interim CEO Ross Levinsohn, it opened the door for the company to settle the dispute under a reshuffled board of directors. Six of Yahoo's 11 directors joined the board after the patent suit was filed.

Yahoo's legal assault had exposed Facebook's vulnerability to patent claims as it prepared to complete the biggest initial public offering of stock by an Internet company. Facebook insulated itself by buying 750 patents from IBM Corp. for an undisclosed amount and spending $550 million to acquire another 650 patents that one of its biggest shareholders, Microsoft Corp., had purchased from AOL Inc. Armed with its own arsenal of intellectual property, Facebook signaled that it wasn't backing down and filed its own patent infringement lawsuit against Yahoo in April.

With Thompson out, Levinsohn quickly began working on a deal with Facebook's chief operating officer, Sheryl Sandberg. The two issued statements Friday praising each other for working toward an agreement.

Yahoo already had been tying many of its services and content to Facebook before the lawsuit was filed. Now the two companies plan to display ads on each other's sites, while Yahoo plans to feed even more of its coverage of major events to the social network.

Although it has been growing at a robust clip, Facebook is still trying to win over skeptical investors. Doubts about the company's revenue potential have weighed on Facebook's stock, which has remained well below its IPO price of $38. The stock gained 26 cents, or nearly 1 percent, to close Friday at $31.73.

Yahoo is trying to snap out of a long-running financial funk brought up by Facebook's success and Google Inc.'s dominance of Internet search and advertising.

Yahoo has gone through four fulltime CEOs in five years in the hopes of engineering a turnaround and sparking revenue growth. The foibles have depressed Yahoo's stock, frustrating shareholders still angry about a squandered opportunity to sell the entire company to Microsoft in May 2008 for $47.5 billion, or $33 per share.

The stock dipped 7 cents to close at $15.78 Friday.

The Facebook pact may have pushed Levinsohn closer to being anointed as Yahoo's permanent CEO. Jason Kilar, CEO of online TV service Hulu, had been under serious consideration for the top job at Yahoo, but Hulu said Friday that he had decided not to pursue the position. The statement was issued in response to several published reports citing unnamed people who described Kilar as Levinsohn's primary competition for the Yahoo post.

Google 4Q 2011 Revenue Disappoints As Ad Prices Sink

SAN FRANCISCO (AP) — Google's moneymaking machine misfired badly in the fourth quarter as its advertising prices fell during the holiday marketing season.

The results announced Thursday fell way below the lofty expectations of stock market analysts. That caused Google's shares to plunge more than 9 percent after the numbers were released.

Google Inc. earned $2.7 billion, or $8.22 per share, during the October-to-December period. That's just a 6 percent increase from $2.5 billion, or $7.81 per share, at the same time in 2010.

If not for certain items, Google says it would have earned $9.50 per share. Analysts surveyed by FactSet had expected $10.51 per share.

Revenue climbed 25 percent from the previous year to nearly $10.6 billion.

After subtracting ad commissions, Google's revenue totaled $8.1 billion. That was about $300 million below the average analyst forecast.

The disappointing performance stemmed from a surprising downturn in the prices that the Internet search leader collects for each click. The average price declined 8 percent from the same time in 2010.

The erosion reversed what had been happening earlier in the year. The year-over-year increases in Google's price per ad click had ranged from 5 percent to 12 percent increase in the first three quarters of 2010.

The fourth quarter marked the first time Google's revenue surpassed $10 billion for any three-month period in the company's 13-year history.

Reaching that milestone wasn't enough to impress investors. Google shares shed $58.56 to $581.01 in Thursday's extended trading.

Microsoft, Amazon Top Nielsen List Of Consumer Electronics Sites With Highest Traffic

Microsoft and Amazon.com are the Internet's most visited consumer electronics sites, while shoppers spend the most amount of time looking at Applewebsites, according to a new Nielsen report based on data collected during September, 2011.

During that month alone, nearly 94 million unique visitors came to Microsoft websites, spending an average of 42 minutes per month on the site. While Apple's websites saw only 68.7 million unique visitors per month, they each spent an average of 1 hour and two minutes on the site.

Rounding out remaining three spots in the top five most visited consumer-electronics sites were Adobe, Mozilla and CNET, the only shopping site on the list which also features technology news coverage.

But with one in three active web browsers perusing the site at any one time, Amazon emerged as the "clear category leader" among brands that sell merchandise, followed by Walmart, Target, Shopathome.com and Overstock.com.

The findings are actually a subsection of a much larger Nielsen study, the State of the Media: Consumer Usage Report, which collected a range of data on consumers' usage of electronic devices, websites and online services.

Worldscreen noted that despite the emergence of new media platforms like smartphones and tablets, television remained the most popular electronic device in the nation with 114.7 million households owning at least one set, and 35.9 million -- or nearly one in three -- households owning four or more.

But television's dominance may be eclipsed in the future as more people purchase mobile phones,according to Mobile Sports Report. Among people age 13 and older, 232 million own mobile phones, compared to 290 million who have televisions.

Stanford's 'Apple Collection' Archives Offer Window Into Company's Origins

PALO ALTO, Calf. -- In the interview, Steve Wozniak and the late Steve Jobs recall a seminal moment in Silicon Valley history – how they named their upstart computer company some 35 years ago.

"I remember driving down Highway 85," Wozniak says. "We're on the freeway, and Steve mentions, `I've got a name: Apple Computer.' We kept thinking of other alternatives to that name, and we couldn't think of anything better."

Adds Jobs: "And also remember that I worked at Atari, and it got us ahead of Atari in the phonebook."

The interview, recorded for an in-house video for company employees in the mid-1980s, was among a storehouse of materials Apple had been collecting for a company museum. But in 1997, soon after Jobs returned to the company, Apple officials contacted Stanford University and offered to donate the collection to the school's Silicon Valley Archives.

Within a few days, Stanford curators were at Apple headquarters in nearby Cupertino, packing two moving trucks full of documents, books, software, videotapes and marketing materials that now make up the core of Stanford's Apple Collection.

The collection, the largest assembly of Apple historical materials, can help historians, entrepreneurs and policymakers understand how a startup launched in a Silicon Valley garage became a global technology giant.

"Through this one collection you can trace out the evolution of the personal computer," said Stanford historian Leslie Berlin. "These sorts of documents are as close as you get to the unmediated story of what really happened."

The collection is stored in hundreds of boxes taking up more than 600 feet of shelf space at the Stanford's off-campus storage facility. The Associated Press visited the climate-controlled warehouse on the outskirts of the San Francisco Bay area, but agreed not to disclose its location.

Interest in Apple and its founder has grown dramatically since Jobs died in October at age 56, just weeks after he stepped down as CEO and handed the reins to Tim Cook. Jobs' death sparked an international outpouring and marked the end of an era for Apple and Silicon Valley.

"Apple as a company is in a very, very select group," said Stanford curator Henry Lowood. "It survived through multiple generations of technology. To the credit of Steve Jobs, it meant reinventing the company at several points."

Apple scrapped its own plans for a corporate museum after Jobs returned as CEO and began restructuring the financially struggling firm, Lowood said.

Job's return, more than a decade after he was forced out of the company he co-founded, marked the beginning of one of the great comebacks in business history. It led to a long string of blockbuster products – including the iPod, iPhone and iPad – that have made Apple one of the world's most profitable brands.

After Stanford received the Apple donation, former company executives, early employees, business partners and Mac enthusiasts have come forward and added their own items to the archives.

The collection includes early photos of young Jobs and Wozniak, blueprints for the first Apple computer, user manuals, magazine ads, TV commercials, company t-shirts and drafts of Jobs' speeches.

In one company video, Wozniak talks about how he had always wanted his own computer, but couldn't get his hands on one at a time when few computers were found outside corporations or government agencies.

"All of a sudden I realized, `Hey microprocessors all of a sudden are affordable. I can actually build my own,'" Wozniak says. "And Steve went a little further. He saw it as a product you could actually deliver, sell and someone else could use."

The pair also talk about the company's first product, the Apple I computer, which went on sale in July 1976 for $666.66.

"Remember an Apple I was not particularly useable for too much, but it was so incredible to have your own computer," Jobs says. "It was kind of an embarkation point from the way computers had been going in these big steel boxes with switches and lights."

Among the other items in the Apple Collection:

_ Thousands of photos by photographer Douglas Menuez, who documented Jobs' years at NeXT Computer, which he founded in 1985 after he was pushed out of Apple.

_ A company video spoofing the 1984 movie "Ghost Busters," with Jobs and other executives playing "Blue Busters," a reference to rival IBM.

_ Handwritten financial records showing early sales of Apple II, one of the first mass-market computers.

_ An April 1976 agreement for a $5,000 loan to Apple Computer and its three co-founders: Jobs, Wozniak and Ronald Wayne, who pulled out of the company less than two weeks after its founding.

_ A 1976 letter written by a printer who had just met Jobs and Wozniak and warns his colleagues about the young entrepreneurs: "This joker (Jobs) is going to be calling you ... They are two guys, they build kits, operate out of a garage."

The archive shows the Apple founders were far ahead of their time, Lowood said.

"What they were doing was spectacularly new," he said. "The idea of building computers out of your garage and marketing them and thereby creating a successful business – it just didn't compute for a lot of people."