The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- Earlier Monday, Microsoft ( MSFT) announced that it would basically split the patents it had recently bought from AOL ( AOL) with Facebook. Facebook will pay roughly half the costs to get their hands on them. Immediately, the pundit-sphere started cackling that Yahoo! ( YHOO) was about to have its head handed to it by Facebook because of this news.
If Facebook gets into search, it could conceivably see that as a very important new revenue stream and one that would put Google ( GOOG) on the defensive. Facebook would be able to leverage all of its social graph data on particular users to yield more differentiated search results compared to Google results. If Facebook does proceed with search, it will want to make money selling ads against its results. When it does, Yahoo! will be in a great position to sue it through ownership of the Overture/GoTo.com patent which it used to sue Google successfully in 2004. As patent lawyers like to say, that particular patent has been battle-tested. Google tried not to pay and -- after many legal attempts -- settled with Yahoo! Facebook would seem to be destined to the same fate. Yet, Yahoo! hasn't sued Facebook yet for it. Why not? What would the damages be? Effectively zero, as Facebook currently isn't in that business. So, Yahoo! chose 10 patents where it feels there is a violation and where Facebook is making money today. But, the settlement talks are surely discussing what future claims Yahoo! might bring against Facebook. Although I was the first person to flag the potential of Yahoo! to go after Facebook last fall, I'm not married to the means by which Thompson is going after Facebook. I'm all in favor of a settlement which is good to Yahoo! holders. Clearly, both sides have something to gain from a settlement. Yahoo! brings its monthly traffic, its ability to be a strong search partner, and its patent portfolio which could well insulate Facebook from future attacks. We'll see what happens. All this huffing and puffing by the blogosphere -- and the posturing by "those close to the situation" at both Yahoo! and Facebook -- probably means absolutely nothing to what the outcome will be. Stay tuned.