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I continue to be amazed at the Silicon Valley visceral reaction to Yahoo! (YHOO) deigning to insist that Facebook (FB) pay for trampling on Yahoo!'s 10 - 20 patents.
There seems to be a gulf between my views that intellectual property deserves to be protected by law and those who think the whole US patent system should be junked and a Chinese copycat system replace it.
Rather than engage in that debate, let me point out that - as the US patent system is likely here to stay - Yahoo! is merely protecting its patents in a similar manner that Steve Jobs did back in 1997 when he took over Apple (AAPL) which we know now was days away from bankruptcy.
A colleague reminded me of the following passage from Walter Isaacson's Jobs' biography about how Steve Jobs got Bill Gates to save the company with a $150 million investment - this is Jobs speaking:
I called up Bill and said, "I'm going to turn this thing around." Bill always had a soft spot for Apple. We got him into the application software business. The first Microsoft apps were Excel and Word for the Mac. So I called him and said, "I need help." Microsoft was walking over Apple's patents. I said, "If we kept up our lawsuits, a few years from now we could win a billion-dollar patent suit. You know it, and I know it. But Apple's not going to survive that long if we're at war. I know that. So let's figure out how to settle this right away. All I need is a commitment that Microsoft will keep developing for the Mac and an investment by Microsoft in Apple so it has a stake in our success.
Luckily, contrary to the received wisdom of Silicon Valley bloggers, Apple kept innovating. I'm not sure the 1997 equivalent to tech bloggers shouted that investors should immediately start shorting Apple's shares because they "stopped innovating" and "relied on patents." If they did, they got hurt. Maybe the bloggers back then would have said Apple's employees' morale would be so low that the company would no longer be able to compete.
But Steve Jobs never did care about the bloggers' views. He did what he had to do to run his business. Yahoo! will do what it has to do.
[Long AAPL and YHOO]
