Yahoo has been preparing to take “formal action” against Facebook over and unresolved patent claim. The homepage giant is claiming Facebook has violated its social networking and online advertising patents. Today, Yahoo has sued Facebook and released the following statement:

Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.

Talks with both companies had been in the works for the past couple of months, but an agreement could not be found. Facebook released the following statement.

We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefitted from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.

All Things Digital’s Kara Swisher reports that Yahoo’s new chief executive Scott Thompson was behind the lawsuit against the social networking giant.

With Thompson’s takeover in January, the company has been restructured, with co-founder Jerry Yang and Chairman Roy Bostock leaving the company.

The lawsuit comes at a dangerous time for Facebook as the company prepares for its IPO. Yahoo used a similar tactic against Google when they were filing for IPO and managed to walk away with some pre-IPO shares.

The 10 patents Yahoo is using to sue Facebook can be found here

Today it was announced that YouTube founders Chad Hurley and Steven Chen have purchased the social bookmaking site Delicious from Yahoo, which acquired the site back in 2005.

Per the press release, Delicious will become part of AVOS, a new Internet company. Current users using Delicious will continue to use the service, but it will now be easier and more fun to save and share what is already on the web.

“We’re excited to work with this fantastic community and take Delicious to the next level,” said Chad Hurley, CEO of AVOS. “We see a tremendous opportunity to simplify the way users save and share content they discover anywhere on the web.”

“We spoke with numerous parties interested in acquiring the site, and chose Chad and Steve based on their passion and unique vision for Delicious,” said John Matheny, SVP of Communications and Communities at Yahoo!

The YouTube founders plan to work closely with the community over the next few months to develop innovative features to help solve the problem of information overload. “We see this problem not just in the world of video, but also cutting across every information-intensive media type,” said Chen.

Could this mean that sites like Digg and Reddit are not that far behind as being sold off as well? Let us know what you think in the comments below.

Almost two years have passed since Carol A. Bartz, who was originally hired to restore the company’s growth, took over as chief executive of Yahoo.

The company’s financial results, revealed Tuesday, show that Yahoo is making only modest headway as it tries to regain some of its former growth as well as its glory. Its business was nearly flat in the third quarter.

“They’re treading water right now,” said Jordan Rohan, an analyst with Stifel, Nicolaus & Company told the New York Times. Bartz also acknowledged that much work was ahead for Yahoo, based in California.

“First you walk, then you run, then you fly,” Bartz commented in a conference call with securities analysts.

Still, though, she pointed to certain areas showing signs of improvement or at least stability. Yahoo’s display advertising business is doing relatively well since revenue from display ads on the Web portal increased 17 percent. But declines elsewhere sadly eroded those gains. As a result, revenue from search advertising and fees both fell.

Overall, Yahoo’s net income more than doubled, to $396 million, or 29 cents a share, from $186 million, or 13 cents a share, in the year-ago quarter. The majority of the increase, 13 cents a share, was a result of a one-time gain from the sale of its HotJobs business. Excluding the sale, Yahoo would have had a profit of 16 cents per share. Revenue climbed 2 percent, to $1.6 billion. Excluding payments to advertising partners, total revenue was $1.2 billion.

Yahoo is trying to emerge from financial stagnation, and now Bartz is under pressure to show actual results.

Her plan has been to focus on the company’s strengths as a Web portal. Yahoo receives nearly 830 million unique monthly visitors, making it still the most visited website on the Internet, worldwide.

Bartz considers outsourcing services less important. Yahoo has already handed its search engine off to their rival, Microsoft. She talked about the transition of Yahoo’s search engine to Microsoft, a process that is about to being finished in the United States. She also mentioned the progress Yahoo has made behind the scenes revamping the technology behind its Web portal. The overhaul is eliminating many of the roadblocks that made it nearly impossible to introduce new services quickly. Bartz also noted an improvement in profit margins, a result of her cost-cutting strategy over the last year. Margins in the quarter doubled to 12 percent from the same quarter a year earlier.

Yahoo shares rose 0.7 percent in after-hours trading, to $15.60.

The author of our favorite webcomic xkcd redesigned his homepage today as a tribute to the passing of Geocities.

Every so often, someone will tell me something that reminds me of how old I am. For instance, did you know that kids who turned 18 this year didn’t see Aladdin in theaters? Today, it’s the passing of Geocities, which is shuttering its doors tonight at 11:59pm.

Finding that out today is just one big mixed bag of nostalgia for me. I’m writing this from a bus wi-fi connection, which has about as much bandwidth at the 14.4k modem I used way back when I made my first Geocities website. Of course I let it fall into neglect shortly thereafter and Geocities, or the current owner Yahoo, cleaned it off their servers.

For those too young to remember geocities, it was one of the first sites to allow used with a basic knowledge of HTML to code their own web pages. Five million fan pages for Jonathan Taylor Thomas later, we had what was the most garish collection of sites that were perpetually under construction displaying blink tags “"perish the thought “" and comic sans headlines. Yahoo purchased Geocities back in 1998 for $3.5bil, which was no small sum of money, and has taken care of it since.

However, now that personalized sites are more likely to be found on Facebook or (the equally garish) Myspace, Geocities has become something of a money bleeder, and Yahoo is pulling the plug. Users are encouraged to port their sites over to Yahoo’s paid service.

So, let us mourn the passing of Geocities as it goes into that good night.

Recently, Legitscript.com and KnujOn.com released a report analyzing the Yahoo Search engine’s advertisements for online pharmacies. The results are quite disturbing and it’s a wonder law enforcement agencies have not yet cracked down.

Legitscript.com is the only Internet pharmacy verification organization in the United States identified by the National Association of Boards of Pharmacy as adhering to its standards for certifying Internet pharmacies. KnujOn.com tracks Internet criminality and has succeeded in removing over 100,000 spam websites from the Internet.

The report, released by these companies on August 18, showed that around 80 percent of the search engine’s advertisements concerning online pharmacies reviewed by the researchers were not operating in compliance with United States federal laws. The report states the researchers were able to order and receive medication normally requiring a prescription without one “" a clear violation of Drug Enforcement Administration regulation of potentially habit-forming medications. One site even imported the medications ordered from India, which is also in violation of United States Law.

The report also touches on Pharmacychecker.com, the pharmacy verification service used by Yahoo, Google and Microsoft to determine the legitimacy of pharmacies in ads they display. The researchers were able to obtain drugs without a prescription from an online pharmacy listed on and approved by Pharmacychecker.com. These drugs were also imported from India.

Yahoo’s current policy mandates that an online pharmacy advertised through the search engine be “based in” the United States or Canada; however, three sites in the study which were approved based on having Canadian pharmaceutical licenses actually shipped their medications from places like India, Singapore And Barbados. A fourth site, also approved in Canada, stated it could only fill prescriptions in Canada and to do so in other countries would be illegal.

It is important to note that these issues are far from isolated, as a previous report focused on Microsoft’s search engine Bing.com and the findings were similar. Also, the American Pharmacists Association, the National Association of Boards of Pharmacy and the National Association on Addiction and Substance Abuse have written Google, Microsoft and Yahoo informing them that they were profiting from online pharmacies acting unlawfully.

“We’re making this a public issue because it’s time for this to stop,” KnujOn President Garth Bruen said. “If the search engines continue to knowingly facilitate illegal prescription drug sales, then we’ll continue to issue these reports. Our reports stop when the problem is fixed.”

“Yahoo needs to require that its Internet pharmacy ads adhere to US laws and National Association of Boards of Pharmacy standards,” LegitScript President John Horton said. “These are the same safeguards that govern brick-and-mortar pharmacies used throughout the US everyday. Shouldn’t American Internet users be assured of the same safeguards online?”

If you are someone who gets his or her medications from an online pharmacy, you may be putting yourself and your family in danger. If this is the case, we suggest you look further into the companies from which you choose to procure your medications.

Yahoo has posted the newest trailer for Zack Snyder’s “Watchmen,” set to release March 6, 2009.

Step aside, Batman.

Yahoo! rejected Microsoft’s $44.6 billion buyout offer.

On February 1 Microsoft announced a proposal to acquire all the outstanding shares of Yahoo! common stock for $31 per share, two-thirds more than it was worth before the offer.t

Here’s what Microsoft had to say in response to the rejection:

It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.

We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers
and advertisers while becoming better positioned to compete in the online services market.

A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a
compelling number two competitor for Internet search and online advertising.

The Yahoo! response does not change our belief in the strategic and
financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We’re not done hearing about this yet.

Microsoft announced Friday their decision to offer to buy Yahoo!, taking all outstanding shares for $31 each in what would be a monster $44.6 billion deal. It would be a 62 percent bonus to shareholders holding a stock valued at under $20 Thursday.

Yahoo’s stock soared in early trading Friday, up over 50 percent at times.

“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”

Yahoo said Friday it will “carefully and promptly” study Microsoft’s bid.

Microsoft made an offer to take over Yahoo! last year, but then chairman/CEO Terry Semel scoffed at it. But under shareholder pressure, Semel recently stepped aside. This new offer comes as the ink on new chairman Roy Bostock office door is still wet. In a letter, Microsoft also addressed Yahoo!’s current CEO and co-founder Jerry Yang.

In their letter, Microsoft said it could save at least $1 billion in cost savings generated by the combination, and that they would offer retention packages to Yahoo! engineers, leaders and employees.

“We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers,” Ballmer wrote in his letter to Yahoo!.

A combined Microsoft-Yahoo! force would be a stiff competitor to Google, who seems to have all but taken over the search engine world and leads in online advertising.

Microsoft said they would expect regulatory clearance and in the second half of 2008 if the deal is accepted.

The Associated Press has called the offer “unexpected.” Microsoft called the offer “compelling.” A struggling Yahoo! may have to carefully weigh their options.