I agree completely. While Y! is clearly acting in desperation, this is an obvious and predictable act given the legal system in which they operate and patent portfolio they have. We can (and should!) demand that they not do the expected, but I the think anger is better focused on systemic reform then getting angry at any single company's actions. In a system of laws, what else should anyone expect but a legal entity to act in what it sees as its own best interest. Software patents need to end; working to that end is the best way to deal with this sort of event.
It's not desperation it all. It is blackmail (or as it was once, and perhaps still, known, "claim-mail").
Facebook has a lot to lose if it is perceived that Yahoo can hurt them, now that they are going public. Which is exactly why Yahoo is doing that, and why they did exactly the same thing when google went public.
The almost-myth of the fiduciary responsibilty of company executives to be irresponsible. I wrote elsewhere [1]:
> A point about the morality of companies angle: the so-called "fiduciary duty" of companies that is an overriding duty to maximise shareholder returns within the constraints of the law above all other ends is a legal obligation in only a few countries. In most countries, including most states in the US, executives have a legal responsibility to be honest and open about their performance and honest (if not very open) about their strategy, but have no legal obligation to prefer a more profitable course of action over another, which is obviously right since there is usually no knowable fact of the matter about whether one business plan will turn out to be more profitable than another.
> In short, the idea that companies have a moral obligation to act immorally if it pays is mostly or always a myth.
There is no chance that Yahoo executives would go to jail if they decided not to pursue a cursed-earth patent troll strategy. Fiduciary duty is about executives not putting their personal interests before that of the shareholders.
It is not even obviously in the company's interest, what they are doing. If cash-rich FB refuses to settle, all 10 patents get invalidated, and Yahoo has to pay heavy legal fees, then Yahoo is left with a smaller warchest of patents, and one whose firepower has been seen to be lacking. Does the quiet period make that such an unlikely outcome?
I had a ton of stock options that would have made me rich if Yahoo had accepted Microsoft's buy out well above the trading price a while back - something shareholders would have loved. So even this particular company is well known for not following the duty of making the most money for its holders...
>even this particular company is well known for not following the duty of making the most money for its holders
The selling of a company doesn't exactly fall into maximization of shareholder profits: it depends on a couple things. The board of a company has no obligation to maximize it's short term value. Otherwise, anytime someone is offered a profitable buyout and turns it down they would violating their social responsibilities. I could be wrong, but I had a similar discussion with a close friend who is a big dog in the world of finance and that's the message I got from him.
Here's some relevant info:
>The role of such statutes is especially important in light of the QVC decision, which prohibits directors from simply approving a strategic merger based on their business judgment that the transaction provides more value in the long term.
http://apps.americanbar.org/buslaw/blt/8-3shareholders.html
If Yahoo has any "brand value", it's with users who are very non-technical, and have no idea or opinions about patent lawsuits.
So brand isn't a good argument against this suit for Yahoo.
Morality might be. But it's hard to get people to act against their financial best interest over the long term, so I still feel the real issue is the patent system.
If the board decide to pursue bogus patent lawsuits, throw millions of dollars at at and lose the case, should they go to jail for making a poor decision?
If they go for it, win, but every single talented engineer at Yahoo! quits in disgust and the company falls apart, should the board go to jail then as well?
