Yahoo Resorting to Patent Trolling

I know times are tough for Yahoo, but I didn’t think they’d resort to this sort of behaviour:

Yahoo Sues Facebook For Patent Infringement

The document with all the information regarding the complaint is a pretty dry read, it also appears to be a photocopy and is hard to read.  However, if you do take the time to read it you’ll be pretty astounded at the stuff that Yahoo has been given patents for and is now suing for.

Basically almost anything that we’d expect to be pretty standard in a current generation web application is covered.  Some items include:

  • Providing a customized web page based on a users preferences (ie if you’re into sports we’ll show you sports etc)
  • Advertising that is relevant to the users and tools to prevent click fraud
  • Creating profiles and tailoring your experience on the site according to your interests
  • Patents related to joining groups around common interests
  • The ability to “connect” to other people and businesses is based on “Yahoo’s patents”
  • Allowing users to have various privacy settings (the 590 patent, which comically was filed in 2007, after Facebook came into being)

The stuff they’re claiming ownership of is incredibly generic stuff.  Now perhaps we just think that because of how far the internet has come and we wouldn’t be here if not for the billions of dollars of R&D done by Yahoo over the years, but I doubt it.

Most of this stuff existed on other websites before Yahoo, they just had the gall to file a patent for it.

Now, some might be saying that it’s no big deal for Facebook.  They’re about to become a $100 billion company when they go public, and they’re killing it so they can afford to do some sort of settlement with Yahoo.  The trouble is that this court case is so much more important than that.  This will set a very important precedent for future software patents.

So many software patents are incredibly vague, and don’t speak to the implementation of a process, but only how the user interacts with the software.  So, Facebook undoubtedly created their own unique code base to achieve all of this stuff that Yahoo is suing for, but because Yahoo has a similar feature they’re suing.  Most if not all of these patents should be invalidated, and it’s important that Facebook fights for that to happen, otherwise Yahoo will begin trolling it’s way through the tech industry going after every single company with similar features.  You allow your users to have granular control over their privacy settings?  Pay up.  You allow your users to have relationships with other users? Pay up.  You get the picture.

Much Ado About RIM

“If Apple came back from the brink, couldn’t RIM do the same thing?”

That was the question my friend asked me last night, and my answer was no they won’t.  Sure they COULD come back from the brink, but it’s improbable enough that I would bet against them.

It was a fair question though.  When you look at just how destitute Apple was back in 1997 when Steve Jobs returned you’d have bet against them too.  There are a few differences though between the two situations that makes it much more difficult for RIM to pull off quite the same turn around.

1) RIM does not have a long lost founder genius of a generation that could return and save the day after a decade long banishment.  Yes, Steve Jobs was gone for over 10 years.  He left the company (was forced out?) and spent the next decade pondering what he would do with the company, what he did wrong etc.

2) RIM makes smartphones for the corporate user, they are not a consumer brand.  Why does this matter?  Because RIM needs to move FAST in order to correct course, and the enterprise market is especially slow moving.  This means that for many of their largest clients the wheels are already in motion to drop them and adopt iPhone or Android as a replacement.  Big clients like some US government agencies are starting to switch and they are right to do so.  They need to know that they’re with a company that will be around in 12 months.  This brings us to our 3rd point…

3) The cascade effect has begun and customer confidence is very important for a platform.  People are starting to write RIM off.  Whether this is fair or not doesn’t matter, it’s happening.  Sales associates at cell phone dealers are telling their customers to steer clear of RIM.  Developers are going to start devoting less of their resources to the platform.  All of this has an exponential effect (in the wrong direction).

4) Apple innovated their way out of trouble by expanding into new markets and dominating them.  Then they doubled down on those successes time and time again to keep growing.  RIM doesn’t have this option.  RIM can try break into the tablet market with their Playbook, but that’s not really working out so great for them, plus it’s not a “new” market, it’s already dominated by Apple.  Good luck stealing Apple’s lunch, stealing people’s lunch is Apple’s specialty.  Apple expanded into the “digital lifestyle” world with their iLife suite of products (iTunes, iMovie, iPhoto, iDVD), then with iTunes they were able to successfully launch the iPod.  Then they had this wide open market where they could sell huge numbers unchallenged and generate HUGE cash flows.  RIM doesn’t have this.  After the iPod and the iTunes Music store they were able to launch the iPhone.  Then what really blew things up was the App Store, and this was so successful because of the iTunes Music Store.  Why does this matter?  Because they had 200 million+ credit card numbers attached to people’s accounts so billing was seamless, they could circumvent the carriers, something nobody had been able to do before.  You get the picture, Apple was able to move into new markets unchallenged and get MOMENTUM, something that RIM lacks.

What Should RIM Do?

My opinion is that in 18-24 months RIM will no longer exist in it’s current form.  What does that mean exactly?  It means one of the following few things will happen:

1) RIM gets bought whole by someone else.  Whether this is for their patents, their customers, their hardware, I don’t know what exactly they’ll do with RIM but someone could buy them.  They’re cheap, and very vulnerable.

2) RIM splits the company up, and sells off or shuts down certain parts of the company.  They’re very popular in the enterprise world, so they could license they’re Blackberry Server technology for secure email delivery and messaging.  They could sell off their handset division like IBM did with their PCs, or they could just shut it down.

The challenge with any acquisition scenarios is that RIM’s real value is in it’s platform.  It’s differentiated because it has it’s own unique software and their email servers.  The challenge is that the other platforms out there (iOS, Android and Windows Phone) don’t really have much use for much of RIM has to offer, and the OEMs (Nokia, Samsung, HTC etc) don’t really have much use in their hardware, or with their software.

It’s unfortunate, especially since they are a Canadian company, but tech is a fast moving industry.  If you can’t keep up you’re going to get left behind.