eCommerce Times: Yahoo To Own More Google Stock under Legal Settlement

Yahoo and Google called off the lawyers yesterday, announcing a settlement in the patent suit that threatened the efficacy of Google's most important revenue stream: automated search ad revenues. Combining two legal cases between the firms, the settlement grants Yahoo a big chunk of Google equity in return for dropping claims. Yahoo will gain stock worth roughly $300 million, depending on what price is set for Google's upcoming initial public offering. Yahoo will get an additional 2.7 million Google shares to add to its current 5.5 million. Yahoo plans to unload 1.6 million shares at the initial offering, less than a fifth of its total Google holdings.

Perhaps most importantly, Overture's patent of automated ad auction markets remains unchallenged in court, which will likely now splash over to the myriad online networks that have popped up and adopted Google's self-serve advertising mechanisms.

Trying to gauge jus how much Google is paying for this patent license will be difficult, as the patent issue is mixed up with a stock warrant dispute in which Yahoo thought it had an additional 2.5 million shares of stock coming its way.

SearchEngineLowdown reports that this will mean a one-time reporting of a massive loss for Google's third quarter. The search blog also helpfully posted a reminder for Google to register the stock it gives Yahoo.