It can drop the patent lawsuit and blame it all on the former CEO

May 14, 2012 13:40 GMT  ·  By

Yahoo has had one tumultuous week culminating in the ouster of its latest CEO Scott Thompson. The Yahoo board went with him and what follows is yet another transition period for the company. However, there may be some unexpected consequences to the move concerning the patent lawsuit against Facebook.

A couple of months back, Yahoo went on the offensive saying that Facebook violated quite a few of its patents and that it had, essentially, built its business on top of Yahoo ideas.

The move sent shockwaves through the industry and Yahoo became an evil villain overnight.

While Yahoo is no stranger to patent lawsuits, since it did the very same thing to Google also when it was about to have its IPO, many said that the entire move could be traced back to the then-CEO Thompson.

Whether he was the scapegoat or the mastermind behind the lawsuit is hard to know. But Yahoo now has a chance to save face by dropping the lawsuit.

If the idea came from Thompson, supported by the board, then the people left at the company can easily change course especially if they didn't like the move in the first place.

If the idea runs deeper through the executive levels, Yahoo has an opportunity to change course and still come out as the good guy, or at least the less bad guy.

What Yahoo chooses to do in the Facebook patent lawsuit now will be more telling than anything before. It if forgoes the lawsuit, we'll at least know that Yahoo realized it was a bad idea, whether it was against it from the start or just after all the backlash.

If Yahoo goes ahead with the lawsuit though, it will be pretty obvious that this was a company-wide though top-level decision, regardless of who came up with it in the first place.