Mark Cuban hopes Yahoo 'crushes' Facebook in patent suit

Tech billionaire thinks $50 billion award would awake consumers to horrors of patent law

Tech billionaire and Dallas Mavericks NBA franchise owner Mark Cuban has some pretty strong opinions about Yahoo's patent lawsuit against Facebook. In a post on his "blog maverick" weblog, Cuban comes right out and says (get this!), "I hope Yahoo crushes Facebook in its patent suit." And that's just the blog title! Can this be? Isn't this the guy who in the past has unequivocally proclaimed his hatred of patents and patent law? Did somebody "get" to Cuban? Insert your conspiracy theory here! Oh, wait, hold off on those conspiracy theories. Cuban's actually working a back-door angle on this thing:

When I read that Yahoo was suing Facebook my immediate reaction was disdain. As I thought more about it, I came to realize that this case could be the water shed moment that causes enough people to recognize just how horrific our patent law is.

Cuban pauses to emphasize that he's "not saying that there is zero value to patents." (Though, quite honestly, one could be forgiven for drawing that conclusion based on many of his previous attacks on patent law.) But he argues that changes in patent law are not going to come from the government because "lobbyists have taken over," lobbyists who push the agenda of "big patent portfolio holders." Hard to dispute that. "Rather than originating in Congress," Cuban writes, "its going to take a consumer uprising to cause change. What better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet?" I'm liking his plan more already! Cuban thinks that if Yahoo is awarded, say, $50 billion in a patent lawsuit against Facebook, "consumers may take notice." Based on Yahoo prying 2.7 million pre-IPO shares out of Google in 2004 to settle an infringement lawsuit regarding the pay-per-click technology Yahoo acquired when it bought Overture Services (formerly GoTo.com) in 2003, Cuban thinks $50 billion isn't out of the question. Cuban's math appears a bit generous here. Google's settlement with Yahoo was worth $230 million, based on the $85 per share price for Google's initial public offering. How does that amount make $50 billion even a remote possibility? Facebook, at least according to the hype fueled by anonymous sources and go-with-the-flow analysts, is supposed to be worth $100 billion, or about twice the award Cuban thinks Yahoo should pursue. When Google went public, it had a market cap of $23 billion, or about 100 times the value of its settlement with Yahoo. Not exactly a precedent for Cuban's case. But the billionaire libertarian is out for blood. "Yahoo should do everything possible to use the patents to tear apart facebook with as large an award as it possibly can get," he writes. "After all there is no way Facebook gets as large as it is without use of Yahoo’s Patents. No personalized pages, no PPC, no Facebook IPO. No Facebook as we know it." Once Yahoo gets its $50 billion and puts Facebook out of business, Cuban says, consumers will "realize what is at stake with patent law as is." He concludes, "Then maybe we can get it right and further innovation and competition in this country." Sounds like a great plan, one that millions of Americans will like. Except they won't have anything to "like" it on.

Chris Nerney writes ITworld's Tech Business Today blog. Follow Chris on Twitter at @ChrisNerney. For the latest IT news, analysis and how-tos, follow ITworld on Twitter, Facebook, and Google+.

Now read this:

HP's perilous PC dilemma

Sure, now they tell us: Former Palm employees say webOS was fatally flawed

Crappy Google problem dogs Mitt Romney

Insider: How the basic tech behind the Internet works
Join the discussion
Be the first to comment on this article. Our Commenting Policies