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Friday, February 16, 2007

Yahoo Patent

*If you haven't already in the past four months, Yahoo is a great long-term stock buy right now. *

Yahoo is prime to take back command of Web 2.0. Why? Back in 1996 when Yahoo went public for $33 million, it smartly embarked on a process to develop innovative web features. What has gotten less press is the fact that Yahoo holds the keys to its destiny hidden in the deft scripting of a couple key patents, one of which just recently issued and is the focus of our IP-Review…

Yahoo received a patent that has the potential to impact business development, and the futures, of many similarly featured companies including Google, Bloglines, Netvibes, Rojo, Dapper, Pageflakes, NewsGator, LifeIO, as well as over about twenty or so young, budding web 2.0 news aggregator sites, even one that hasn’t really launched.

In 1997, Yahoo was developing a core service: user customizable web pages. What developed defines a lot about who Yahoo is. During this period, it filed an application covering this core concept which resulted in a ‘Dynamic Page Generator’ patent that covered saving a template and delivering real-time information to a user. Another ‘Dynamic Page Generator’ patent just issued sealing the deal. Here is a solid example of Yahoo’s newly minted patent claims:

Some say that the longer the claim, the less valuable the patent. This is a case where we feel Yahoo may have a mighty asset at its disposal. As we’ve noted, many start ups have sprouted in the last two years to leverage RSS and AJAX to provide improvements to Yahoo’s offering.

Tying the claims to the web 2.0 services we’ve mentioned is quite an important step in assessing the potential for infringement. We feel there are two critical elements that need to be met for this patent’s claims to potentially “read on” the myriad of web 2.0 companies’ services. First, the user has a customized template that is saved and stored on a host server. Second, real-time information is stored on the host server and delivered to the user in the template. For most news aggregators, AJAX pretty much defines user customization that is then a saved template. Looking into how real-time information is delivered, Mozilla says: “A desktop RSS aggregator would be at the client end of the RSS syndication. A web-based RSS aggregator would be at the client end of the RSS syndication.” So, the second critical element of real-time information stored locally also appears to be applicable.

Yahoo’s potential to assert its patent rights is a case where it would be hard not to agree that: 1. Yahoo was a pioneer in the user-defined web experience; and 2. Yahoo is still using and [attempting to] benefit from this core feature today. With performance stagnating, investor pressures on the $41 Billion market cap company’s management surely mount.

Yahoo may have been handed a golden ticket, but the real question is, “How will it be used?”

1 comment:

Anonymous said...

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